I'll give credit where I think it's due -- Diamond Foods (NASDAQ:DMND) has some pretty tasty flavored nut snacks and its Emerald brand TV commercials were pretty clever. As for the stock? Yeah, well . I think I'd rather spend the money on those almonds and cashews.

In its second quarter as a publicly traded company, Diamond posted its second straight earnings miss. It wasn't a bad miss, mind you, at just about $0.03 off the median estimate, but it's not exactly getting things off on the right foot.

Sales were up 3% in the quarter as strong North American retail sales growth offset weakness in the international business. One reason, perhaps, not to worry too much about this quarter's minor miss is that about $5 million worth of the company's walnut shipments were delayed because of a late harvest.

Looking below the sales line, things get a little more confusing. Because Diamond Foods transitioned from a cooperative structure to a more standard public corporate structure, there are some valid distinctions between generally accepted accounting principles and non-GAAP earnings. Specifically, the company made progress on both gross and operating margins when you use the non-GAAP figures (and, in this case, I think you should).

The downside to this story, though, is that this is not an industry that is especially conducive to strong long-term growth. Assuming, then, that the company can manage to grow at a low teens rate, you might want to hold off in the hopes of a more appealing entry price.

Diamond Foods is certainly a major player in the nut market, but the snack market in general is tough. You have small, specialized players such as J&J Snack Foods (NASDAQ:JJSF) and Lance (NASDAQ:LNCE) as well as giants such as Kraft (NYSE:KFT), Ralcorp (NYSE:RAH), and Sara Lee (NYSE:SLE) all fighting for shelf space and mouth share.

You absolutely can make money on food stocks, but you have to buy them carefully and stay cognizant of the risks: competition, weather, bad harvests, and fickle consumer tastes. If Diamond Foods got cheap enough, I might think about the stock, but buying much more than a toe-in-the-water stake today would seem a bit nutty to me.

For more Foolish snacks for your brain:

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).