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Non-Tech : Smart Balance (SMBL) A smart and balanced investment!
SMBL 6.520-7.9%May 15 4:00 PM EDT

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To: Glenn Petersen who wrote (10)8/17/2008 12:45:25 PM
From: Arthur Radley   of 33
Janney Montgomery Scott Initiates Coverage on Smart Balance (SMBL) with a Buy

August 14, 2008 3:41 PM EDT

Janney Montgomery Scott initiates coverage on Smart Balance Inc. (Nasdaq: SMBL) with a BUY rating and a 12-month fair value estimate of $11 per share.

"Consumer trends toward healthy eating and a steady diet of news surrounding trans fats and cholesterol provide a solid backdrop for the Smart Balance franchise. This former Special Purpose Acquisition Corp (SPAC) has made considerable infrastructure strides over the last 12 months,
adding experienced management, an ERP system, launching new advertising, accelerated the R&D pipeline, expanded distribution, and improved the capital structure. We believe the company can increase revenue and EBITDA at a 25% growth rate over the next three years as it continues to gain share in its core buttery spread business, migrates the brand successfully into other categories, and expands margins as gross margins recover and the company leverages marketing and G&A spending. We expect 2009 to show sales growth of 35% and $0.15 per share in earnings, the first relatively normal year for the company. The recent weakness in the stock, due to a lower than expected 2Q08, presents an excellent entry point into this growing business While the stock appears expensive on a current P/E basis, we believe the value of the growing free cash flow is better captured in our DCF analysis."

Smart Balance, Inc., formerly Boulder Specialty Brands, Inc., is a marketer of functional food products in the United States (under the Smart Balance and Earth
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