Diamond Foods On The Recovery (DMND)

Diamond Foods, Inc. (NASDAQ: DMND) does not feel like its ‘situation’ is resolved yet.  What may be coming to an end is the hugely negative overhand of the panic.  If so, its stock may be on the mend.  The company recently updated its performance and said it will have some price hikes due to higher walnut costs.  If you have been tracking the walnut grower issues and the threat of some walnut farmers to no longer supply Diamond Foods during the scandal, then the higher prices should not really be a surprise.

Now Diamond Foods has hired an adviser to help strengthen its balance sheet and to shore up its capital structure.  The move down from over $95.00 in the share price here was violent and ugly.  But after a 4% gain to just over $25.50 on Tuesday, the stock is actually now up from a low of $21.41.  This is a gain of almost 20% from the worst part of the lows.

Investors may get some more good news, or less bad news, that the investigations into the company are not company-end events.  Sadly, there is one key issue to consider.  It would be very rare for a company that was a massive growth engine to be back in favor enough that the good old days of growth would instantly arise again.  It is very possible that even in a year or more that Diamond Foods is still in a recovery mode rather than a whole new growth mode.

JON C. OGG