June's Top Analyst Call: Canaccord on Smart Balance

When it comes to stock research, there is no shortage: there are dozens of major investment research firms that publish reports on a daily basis. In the month of June, Benzinga tracked close to three hundred analyst reports. Overall, these reports have had varying levels of success. Still, one call in particular rose above the rest. Smart Balance SMBL was initiated with a Buy rating and an $8 price target by Canaccord Genuity analysts Scott Van Winkle and Mark Sigal. Their call came on the heels of Smart Balance acquiring Udi's Health Foods, a leading US glutten-free brand. “We continue to believe that Smart Balance has a favorable financial model and platform for growth in the healthier foods arena that is enhanced by the Udi's acquisition,” Messrs. Van Winkle and Sigal wrote in their note. “We believe SMBL is reasonably valued at 9.5x 2013E EBITDA and 20x EPS, with peers trading at higher valuations. 12-month target increased to $8 from $6.50, implying 12x F2013E EBITDA.” As the month unfolded, their take on the stock proved correct. Smart Balance closed at $6.07 following the release of their note. By the close on June 29 - the last trading day in June - shares traded at $9.39. That amounts to a 54.7 percent appreciation for the month. Since then, the stock has continued to rally, trading near $10.50 on Friday. On June 21st, Canaccord Genuity increased their price target further from $8 to $10 to account for the share appreciation. Smart Balance continues to be rated Buy at the firm. During June, S&P 500 and the Dow Jones Industrial Average returned around 3.6 percent each, whereas the Nasdaq composite returned just under 4 percent.