Diamond Foods Shares Jumped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of packaged-food company Diamond Foods (NAS: DMND) surged 12% on Friday after its fourth-quarter results and full-year outlook topped Wall Street expectations.

So what: Diamond has been on an acquisition spree in recent years to broaden its lineup of snacks, and yesterday evening's earnings beat -- $0.52 per share versus the consensus of $0.44 -- is yet another sign that the strategy is paying off. In fact, the shares are hitting a new 52-week high on the news and have now more than doubled over the past year.

Now what: Expect even more growth to come. Thanks to its $1.5 billion purchase of the Pringles brand from Procter & Gamble (NYS: PG) (expected to close in December), Diamond stands to triple the size of its business and become the world's largest snack company behind only PepsiCo (NYS: PEP) . With management issuing market-topping full-year guidance as well, Diamond's share price momentum seems like a good bet to continue.

Interested in more info on Diamond?Add it to your watchlist.

At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. The Motley Fool owns shares of PepsiCo.Motley Fool newsletter serviceshave recommended buying shares of PepsiCo and Procter & Gamble.Motley Fool newsletter serviceshave recommended creating a diagonal call position in PepsiCo. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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