Smart Balance Is Behaving Better

Smart Balance's heart healthy regimen hasn't been a financial winner for Al and Crusty. My game-plan has been buy it and tuck it away for 5 years and let Steve Hughes do his magic. Hughes has done it several times before and the bet was that he'd build a billion dollar consumer products lineup and dispose of it profitably. I'm several years into that plan and it hasn't gone smoothly, especially 2010.

After being as low as $3.35 several months ago, its share price has marched up to $5.50. I wish I could justify the rise by significantly improved operational performance, but I can't. The country's milk leader, Dean Foods [DF] has awakened during the same period and enjoyed a similar trajectory. I don't care if SMBL rides DF's coattails as I'm elated that I'm finally in the black again.

The company's recent conference call was positive and their current advertising strategy of combining products in each ad is effective. Milk is doing well, spreads are struggling somewhat, and their Whole Foods venture is promising. They remain upbeat about extending the brand.

Since I've got a couple of years left in my original plan, I'm staying the course. $5.50 makes it easier, as does my new found environmental wacko-ness. Healthy, natural, and organic brands have been able to grow in spite of the economy and I continue to believe that Hughes and his team are on the right track. I hope I prove to be as smart as Al.