Hilary Kramer's Daily Picks & Pans

Friday, June 8, 2007 Guest blogger: Larry Schutts, vice president of Stockwinners.com and a contributing editor for Theflyonthewall.com. Larry looks for stocks with technical and fundamental characteristics indicating gains in the next 30 days. However, price movements may be volatile. He includes a stop-loss price in each post. Consider selling a position should the stop-loss be violated.

Consolidation in the food industry has only left a few of the specialty companies trading on the major exchanges. One such outfit is headquartered in Stockton, California.

Diamond Foods (NASDAQ:DMND) processes, markets and distributes culinary nuts and snack products under the Diamond, Emerald and Harmony brands. The firm's walnuts, almonds, Brazil nuts, hazelnuts, pecans, pine nuts and Spanish peanuts are sold for snacking and for use in home cooking and restaurant recipes. Mass merchandise customers include Walt-Mart Stores, Inc. (NYSE:WMT), Safeway Stores Inc. (NYSE:SWY) and Kroger Co. (NYSE:KR). The firm does business in North America, Europe and Asia.

The company pleased investors earlier in the week, when it reported Q3 top and bottom line results that handily topped Street estimates and guided FY07 expectations to levels in-line with analyst ranges. DMND shares popped into the initial stages of a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy" and four "holds." Analysts expect a 43% growth rate, through the next year. The DMND Price to Sales ratio (0.57), Price to Book ratio (2.25), Price to Cash Flow ratio (14.95), Price to Free Cash Flow ratio (30.37), Sales Growth rate (43.09%) and EPS Growth rate (-0.20 to -0.09 yr/yr) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 54% of the outstanding shares. Over the past 52 weeks, the stock has traded between $13.15 and $19.93. A stop-loss of $15.10 looks good here.

hilaryonstocks at 3:41:00 PM EDT Blog about this entry |  Add to del.icio.us |  digg this

This entry has 1 comments: (Add your own)

• #1 Comment from jomacu25 
  6/8/07 4:03 PM | Permalink

  I tried a couple of their products when they first came on the market and was not impressed. Went back to Planter's.
  
  Susafoo