[ychart ticker="SMBL" calc="price" zoom="3" format="real"]Gluten-free is removing to be a ultimate craze in a full of health food markets. Little wonder that Wall Street is suddenly taking an enthusiastic fresh look at Smart Balance (SMBL), one of a major makers of heart-healthy food products thats broadening its product line by removing into a rapidly growing $2.5 billion gluten-free market. Smart Balance on Aug. 1 acquired Glutino Food Group, a leader in a gluten-free food chain. A highly profitable privately held Canadian company, its premium-priced products have steadily grown in sales at a 10% annual rate. Food-without-gluten is increasingly being regarded by many healthy-food expertsas a healthier way of eating, along with a vastly popular natural and organic food products. So if you have visited your local grocery store or even Wal-Mart (WMT), you would have noticed that many food items are labeled gluten-free. In fact, gluten-free is now a brand new buzz word in a healthy-food world. These products, creatively meant for people who suffer from an ailment called celiac, have gone mainstream and have become a brand new hotly desired items in groceries and supermarkets, joining a ranks of natural and organic foods. Industry analysts predict that sales of gluten-free food will exceed $5 billion by 2015.Apart from Wal-Mart, a other big retailers that amply supply their shelves with gluten-free food products embody Whole Foods Market (WFM), Kroger (KR), Target (TGT), Publix Super Markets, and Wegmans Food Markets. Smart Balance already has strong relationships with these companies, says Smart Balance Chairman and CEO Stephen Hughes, who hopes to further bolster such distribution partnerships with a companys entry into a gluten-free food market.Thats expected to add to Smart Balances appeal to investors. Some large institutions already own stakes in Smart Balance, including PrimeCap Management, which owns an 8.6% stake; Dimensional Fund Advisors which holds6%; and Vanguard Group, with 5%.Glutino shoul! d expand Smart Balances product category and add to its bottom line within a year, says Hughes, who expects a acquisition will be a big winner.So do Wall Street. Strategically, we think Glutino fits well with Smart Balances goal of addressing highly motivated needs, such as a gluten-free diet, a market thats already growing rapidly, says Michael Lavery, analyst at investment firm Sidoti & Co. Glutino provides a significant upside to SMBL given a growth trajectory of a gluten-free category, adds Laverty, who rates SMBLs stock, now trading at $4.95 a share, a buy with a 12-month price target of $10. Its estimated that three million Americans suffer from Celiac disease, also referred to as gluten intolerance. Analysts count another 40 million people who suffer from non-celiac gluten intolerance. Theres growing evidence that a gluten-free diet can help mitigate a symptoms of other medical conditions, says Hughes. And gluten-free products also have broad appeal among consumers with other allergies who recognize gluten-free foods to be safer than products containing gluten, he adds.Gluten is a protein found in wheat, barley, rye and oats, used in food as an addition for flavoring and as a thickening agent. It sets off an autoimmune reaction in people suffering from Celiac, causing destruction of intestinal villi, which protects a lining of a small intestine. Destroying a villi in a small intestine causes nutrients to pass through without being absorbed. Nutrition is an issue for Celiacs because without some food like grains, removing sufficient amounts of vitamins, minerals and fiber becomes difficult. Experts say a gluten-free diet is a only medically accepted treatment for Celiac.NEW AND ATTRACTIVE CATEGORYWe view Smart Balances acquisition of Glutino positively as it provides SMBL with a brand new and attractive category outside of its core low-growth spreads business, says Mitchell B. Pinheiro, analyst at Janney Capital Markets. The gluten-free category is growing at a double-digit rate, and should be accretiv! e to ear nings over a next 12 months, says a analyst, who rates a stock a buy.Because of a Glutino acquisition and Smart Balances better-than-expected second-quarter results, Pinheiro has raised his 2011 earnings estimate to 22 cents a share from 19 cents and his 2012 forecast to 30 cents from 29. Smart Balance earned 10 cents in 2010. Glutino, whose gluten-free dedicated sales are growing at about 30% annually, posted sales of $55 million in mercantile year 2011 ended Mar. 31, 2011. Its products embody bagels, pretzels, breakfast bars, cookies, frozen pizza and other frozen food products. Hughes says those products fit well with Smart Balances products within its Earth Balance, Bestlife, and Smart Balance brands. They embody margarine, buttery spreads, butter sticks, peanut butter, cooking oil, sprays and shortening, mayonnaise, popcorn, cheese and cream cheese, and milk. Its divert product has an extra-healthy twist: its a no-fat divert enhanced with vitamins E and D, high omega-3 content, and loaded with up to 30% more calcium and protein than ordinary total milk. So analysts figure that gluten-free products would blend in smartly with a companys goals. The gluten-free segment is complementary with our corporate vision of creating a health and wellness innovation platform that builds brands targeted at highly motivated consumer needs, says Hughes. Glutino addresses a specific dietary need, he notes, that has created a strong consumer following, establishing Glutino as a preeminent gluten-free brand.Indeed, Smart Balance is entering a brand new hot category with Glutino's acquisition, so we view it favorably, says analyst Scott Van Winkle of Cannacord Genuity, a global capital markets unit of Canadas Cannacord Financial. The acquisition provides a near-term growth vehicle for Smart Balance and broadens a category exposure immediately, he adds.With a growing consumer appeal of full of health food products, bolstered by a emergence of gluten-free foods, Smart Balance provides investors with a brand new opportunit! y in a b roadening food industry.