Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Diamond Foods, Inc. (DMND) Destined for Greatness?

Page 1 of 2

Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Diamond Foods, Inc. (NASDAQ:DMND) fit the bill? Let’s take a look at what its recent results tell us about its potential for future gains.

Diamond Foods, Inc. (NASDAQ:DMND)

What we’re looking for
The graphs you’re about to see tell Diamond Foods, Inc. (NASDAQ:DMND)’s story, and we’ll be grading the quality of that story in several ways:

Growth: are profits, margins, and free cash flow all increasing?

Valuation: is share price growing in line with earnings per share?

Opportunities: is return on equity increasing while debt to equity declines?

Dividends: are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let’s take a look at Diamond Foods, Inc. (NASDAQ:DMND)’s key statistics:

DMND Total Return Price Chart

DMND Total Return Price data by YCharts

Passing Criteria 3-Year* Change Grade
Revenue growth > 30% 50.6% Pass
Improving profit margin (276.1%) Fail
Free cash flow growth > Net income growth (77.8%) vs. (260.2%) Pass
Improving EPS (226.2%) Fail
Stock growth (+ 15%) < EPS growth (46.5%) vs. (226.2%) Fail

Source: YCharts.
*Period begins at end of Q1 2010 (Jan. 30).

DMND Return on Equity Chart

DMND Return on Equity data by YCharts

Passing Criteria 3-Year* Change Grade
Improving return on equity (186.5%) Fail
Declining debt to equity 282.5% Fail
Dividend growth > 25% Suspended in 2012 Fail
Free cash flow payout ratio < 50% None N/A

Source: YCharts.
*Period begins at end of Q1 2010 (Jan. 30).

How we got here and where we’re going
Anyone who’s followed Diamond Foods, Inc. (NASDAQ:DMND)’s perilous saga over the past few years should not have expected the company to turn in a particularly great performance on these tests. Two out of eight passing grades (the final grade is exempted due to the dividend’s suspension) is about par for the course, but this low starting point offers the company ample room for improvement over the next year. The company’s surprise quarterly profit has boosted shares to their highest level of 2013, but there’s a long way to go before Diamond can recapture its pre-scandal peak.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!