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 Emerald Nuts maker Diamond Foods (DMND.DL) jumped 20% today after the company settled a lawsuit
So what: Diamond announced a proposed $96 million settlement relating to accounting troubles. The settlement would be paid with $11 million in cash and 4.45 million shares of stock.
Potentially better news was that the company said it sees fiscal fourth-quarter revenues being between $196 million and $201 million, well above the $187 million analysts expected.
Now what: Long-term, the improved financial results will mean the most because they could help the company reduce leverage. But the proposed settlement was also about 25% to 40% of what plaintiffs thought was possible, so if it holds up, the settlement may be a good deal. I think the company's improved financial outlook will help, but I'd like to see much lower leverage before buying in.
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