Why Diamond Foods, Inc. Shares Are Poised to Bounce Back

Does this analyst make a good case? Or is it just more noise from Wall Street?

Jun 18, 2014 at 9:56AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Diamond Foods (NASDAQ:DMND) rallied 3% in premarket trading after KeyBanc upgraded the packaged-food company from hold to buy.

So what: Along with the upgrade, analyst Akshay Jagdale planted a price target of $32 on the stock, representing about 16% worth of upside to yesterday's close. While contrarian traders might be turned off by Diamond's sharp pullback recently, Jagdale's call could reflect a sense on Wall Street that the concerns surrounding its growth trajectory are becoming overblown.

Now what: According to KeyBanc, Diamond's risk/reward trade-off is rather attractive at this point. "The recent underperformance in Diamond Foods's stock price, elimination of the 'tail-risk' associated with the Company and an emerging inflection in DMND's Snacks segment growth are the main drivers behind our upgrade of the stock," said Jagdale. "We acknowledge that the Company's Nut business is still a long way away from a successful turnaround; however, we think the stock works despite this." With Diamond shares still off about 20% from their 52-week highs and trading at a PEG of 1, the downside certainly seems limited enough to bet on its long-term growth. 

Warren Buffett's biggest fear is about to come true
Warren Buffett just called this emerging technology a "real threat" to his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth more than $2 trillion. It won't be long before everyone on Wall Street wises up; that's why The Motley Fool is releasing this timely investor alert. Click here to learn more about what's keeping Buffett up at night, and the one public company we're calling the "brains behind" the technology.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information