It's been more than the just efficiency improvements, however. To turn things around, management has also focused on innovative brand strategies and distribution. The company plans to launch new flavors of its ready-to-eat popcorn and a variety of Kettle-branded real-sliced potato chips.
Diamond has always prided itself on its product portfolio. But these new launches, which will raise Diamond's profile in the snack food categories, may serve as catalysts to propel the stock upward in the second half of the year. Plus with ongoing supply chain efficiencies and cost savings measures, this company has just begun to realize its full potential.
There's always the risk that snack giants such as Mondelez (MDLZ) and Pepsico (PEP), which has strong snack brands like Frito Lay, may take away some of Diamond's momentum with increase pricing pressure. But management has shown that it can withstand much bigger adversities.
In the meantime, investors have to be encouraged that the doom-and-gloom period is finally over. With expectations still relatively low, Diamond should have an easier time meeting or beating this quarter's results. The direction the stock takes, however, will be based on guidance.
After strong gains in Diamond's shares, there's limited upside potential, but $35 is still attainable. It's not a robust premium, but it's enough to whet the appetite.
At the time of publication, the author held no positions in stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.