Why Smart For Life Stock Is Racing Higher

Smart for Life, Inc. SMFL shares are trading higher Monday after the company announced it would acquire Purely Optimal Nutrition.

The Details:

Smart for Life will acquire Purely Optimal Nutrition, an eCommerce nutraceuticals company with operations in North America. The company expects the acquisition deal to close within the next eight weeks. 

“This acquisition is another validation of our ‘Buy-and-Build’ strategy designed to establish Smart for Life as a major international force in the Health & Wellness sector,” stated Darren Minton, CEO of Smart for Life. 

“We could not be more excited to extend our offering to include Purely Optimal’s broad product line, which includes dozens of high-quality supplements. Purely Optimal is currently generating estimated revenue in excess of $8 million and over $1 million of Adjusted EBITDA for the trailing twelve months. In addition, the favorable impact and synergies with our manufacturing operations cannot be overstated,” Minton added. 

Smart for Life shares are climbing on heavy trading volume following the acquisition announcement. According to data from Benzinga Pro, more than 42.5 million shares have been traded in the session, compared to the stock’s 100-day average of less than 484,000 shares.

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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 12.38%, you'll need to buy a share of Generation Income by the April 12. Once done, you can expect to receive a nominal payout of $0.04 on April 30.

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 62.4% at 81 cents at the time of publication Monday.

Image: Courtesy of Smart for Life, Inc.