This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Diamond Foods Is Out of the Rough

Stocks in this article: DMND MDLZ CAG

NEW YORK (TheStreet) -- Since reaching a near-term low of $20.85 last September, Diamond Foods (DMND) have been investors' best friend. Shares are up close to 50% over the past six months. Investors now want to know has this company fully emerged out of its rough patch.

Diamond, whose products include PopSecret popcorn, Kettle chips and Emerald snack nuts, had a tough 2013. In August the company had to pay $96 million in cash and stock to settle a securities lawsuit related to an accounting scandal. The company was alleged to have improperly accounted payments to walnut farmers. Later, the company reported a $36 million write-down from the Kettle-brand assets (and other items).

Complicating matters, this decision was made amid a period of weak walnut supply. It didn't make sense. At least that was the popular opinion. The argument was rivals including Mondelez (MDLZ) and ConAgra (CAG) were too far ahead, developing strategic growth initiatives while Diamond resorted to negotiating settlement terms with the Securities and Exchange Commission.

Today, Diamond -- although not flawless -- looks like a new company. Its shares are up over 18% for the year to date as of Friday's close of $30.60. Management has remained positive and has focused on implementing changes aimed at cleaning up Diamond's. This includes installing a new chief financial officer. These moves have begun to pay off.

Although not much was expected in the December quarter, Diamond showed it was cut above. Following Diamond's brutal September quarter, which missed earnings estimates, the company posted 1% revenue increase in its snack business. It was not a dominant performance. But it still beat the consensus estimate.

Management had offered a gloomier-than-expected outlook for the December quarter. This sent the shares tumbling 17%. So on a relative basis, the 1% growth in snacks should be considered a victory.

It seems management has taken control and is doing a much better job in shifting the company's product mix. It was encouraging the modest gain arrived even amid weak sales in Kettle U.S. The good news is  management doesn't expect this weakness to continue. Plus, both Pop Secret and Kettle U.K. continue to drive higher sales.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs