Trade-Ideas LLC identified

Diamond Foods

(

DMND

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Diamond Foods as such a stock due to the following factors:

  • DMND has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.8 million.
  • DMND has traded 224,419 shares today.
  • DMND is trading at 17.21 times the normal volume for the stock at this time of day.
  • DMND is trading at a new low 3.06% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on DMND:

Diamond Foods, Inc., a packaged food company, processes, markets, and distributes snack products and nuts. It operates in two segments, Snacks and Nuts. The Snacks segment offers microwave popcorn products and potato chips under the Kettle and Pop Secret brands. DMND has a PE ratio of 28. Currently there are 3 analysts that rate Diamond Foods a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Diamond Foods has been 230,600 shares per day over the past 30 days. has a market cap of $1.1 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.38 and a short float of 8.1% with 4.71 days to cover. Shares are up 11% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Diamond Foods as a

buy

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • DIAMOND FOODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DIAMOND FOODS INC continued to lose money by earning -$6.29 versus -$8.13 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus -$6.29).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 106.0% when compared to the same quarter one year prior, rising from -$105.63 million to $6.29 million.
  • Net operating cash flow has significantly increased by 96.66% to -$5.46 million when compared to the same quarter last year. In addition, DIAMOND FOODS INC has also vastly surpassed the industry average cash flow growth rate of 8.54%.
  • Powered by its strong earnings growth of 105.50% and other important driving factors, this stock has surged by 25.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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