What's Going On With Smart For Life's Stock?

Zinger Key Points
  • Smart for Life announces the successful completion of its restructuring program. 
  • The program included debt restructuring and the successful liquidation of the company's senior debt facility.

Smart for Life, Inc. SMFL shares are trading higher Thursday. The company recently announced the successful completion of its restructuring program. 

What To Know:

Smart for Life's restructuring program included recapitalization of the company with equity and debt financings, the sale of certain non-performing assets, the sale and leaseback of its Doral manufacturing facility, the sale of 51% of Ceautamed Worldwide, LLC, a subsidiary, for $3.4 million and the successful liquidation of the company’s senior debt facility.

The company also converted select debt obligations to equity which resulted in an approximate 6-fold enhancement of the company’s net shareholders’ equity to an expected $6 million. The debt conversions also eliminated significant ongoing interest expense incurred by the company.

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“This sets the stage for the next chapter of Smart for Life, as we have effectively addressed a broad spectrum of challenges facing the Company, while successfully eliminating and converting significant amounts of debt to equity as part of our recapitalization initiatives,” stated Darren Minton, CEO of Smart for Life. 

“These initiatives have strengthened our balance sheet, yielding an expected net shareholder’s equity of $6 million. Additionally, we have reduced losses across all fronts, significantly enhancing the financial viability of Smart for Life. We are now poised to substantially expand our pipeline of potential acquisitions as part of our Buy-and-Build strategy.”

Is SMFL A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Smart for Life‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Smart for Life does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 11.35%, you'll need to buy a share of Nordic American Tankers by June 28, 2024. Once done, you can expect to receive a nominal payout of $0.12 on July 18, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Smart for Life will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

SMFL Price Action: According to Benzinga Pro, Smart for Life shares are up 55% at $6.09 at the time of publication Thursday.

Image: Courtesy of Smart for Life, Inc.

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