NEW YORK (TheStreet) --Shares of Diamond Foods (DMND) are down by 0.03% to $30.85 in mid-morning trading on Thursday, following speculation that the company will look to sell itself in pieces after failing to find a buyer for the $1 billion snack foods company, the New York Post reports.
Rather than continue to seek out a buyer for the entire company, which produces Pop Secret popcorn and Emerald snacks, Diamond is said to have begun accepting bids on units of the company through the middle of October.
Some investors believe that the company's Kettle potato chips segment could bring in between $1 billion and $1.5 billion, the Post added.
The price above the $1 billion market cap of the entire company shows the weak state of the nuts and popcorn units, the Post noted. Currently, Diamond doesn't have the scale it needs to compete with its larger peers, sources told the Post.
Separately, TheStreet Ratings team rates DIAMOND FOODS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate DIAMOND FOODS INC (DMND) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, 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 analysis by TheStreet Ratings Team:
- 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 two years. We feel that this trend should continue. During the past fiscal year, DIAMOND FOODS INC turned its bottom line around by earning $1.04 versus -$6.29 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.04).
- 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 524.0% when compared to the same quarter one year prior, rising from -$1.86 million to $7.87 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat 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 7.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Food Products industry and the overall market, DIAMOND FOODS INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: DMND