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Aggressive Growth

Diamond Foods, Inc.

April 17, 2009 | Comments: 0
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DMND
Diamond Foods, Inc. (DMND - Analyst Report) analysts continue to revise estimates upward and the stock has spiked through a key level.

Company Description

Diamond Foods is a branded food company specializing in processing, marketing, and distributing culinary, snack, in-shell and ingredient nuts under the Diamond of California and Emerald of California brands. Diamond's products include walnuts, pine nuts, pecans, peanuts, macadamia nuts, hazelnuts, cashews, Brazil nuts and almonds.

The company distributes is products to Asia, Europe, and the U.S. under the Diamond, Emerald, and Harmony brand names. Diamond is headquartered in Stockton, California, employs 750 people, and has a market cap of $421 million.

Estimates Rise Again

I wrote about Diamond on Mar 13 and since then estimates have once again seen an up-tick. Over the past month full-year estimates for this year and next year have both added 3 cents to their totals.

The consensus for 2009 is now $1.34, up from $1.31. Estimates for 2010 are averaging $1.68, up from $1.65. If these estimates are met the year-over-year growth rates will be 47% and 26%, respectively.

Great Quarter

As I discussed in Mar, Diamond reported second-quarter results for fiscal 2009 on Mar 11. The company announced earnings per share of 37 cents, beating the consensus by 7 cents. Earnings were up 118% on a year over year basis.

Net sales were $150.6 million, a 13% increase over the same quarter last year.

Michael J. Mendes, President and CEO, said "The attractive value proposition of our consumer franchise is driving strong growth and enabling us to achieve greater scale."

Diamond will release its fiscal third-quarter results on May 27 after the closing bell. An earnings call will be the following day at 1:30 Pacific Time.

The Chart

Shares of DMND have pushed through resistance near $27. The stock seems to have slowed which typically happens after a rapid accent. It may trade sideways for a bit, before another period of gains. Take a look at the chart below.