Why Diamond Foods Hasn't Recovered This Year

As we've hit the halfway point for 2012, now's a good time to look back at what's happening with the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Diamond Foods (Nasdaq: DMND). The company was firing on all cylinders until accounting scandals forced the company to give up a lucrative deal to add to its snack business, losing out to a competitor. In the aftermath, the company still hasn't reassured investors that the future looks brighter than its recent past. Let's take a quick look at how the stock is doing so far this year.

DMND Total Return Price data by YCharts

Stats on Diamond Foods

Sources: S&P Capital IQ, company reports.

Why has Diamond Foods fallen flat in 2012?
Diamond Foods largely remains in limbo. Ever since an accounting scandal cost it the chance to buy the Pringles snack-food division from Procter & Gamble (NYSE: PG) in favor of Kellogg (NYSE: K), Diamond Foods has been adrift with no obvious recovery in sight. The company lost its CEO and CFO in the wake of the scandal, and because it still has to go back and restate two years of financials, we don't have its recent results to look at.

Obviously, a lot depends on what the restated financials show. Before the scandal, Diamond Foods seemed to be a growth machine, so if any of that potential survives in the restated figures, then the stock could soar from current levels.

Still, the snack foods industry looks like it will get even more competitive in the future. PepsiCo (NYSE: PEP) is solidifying its hold on the U.S. snack market, but Kraft Foods (NYSE: KFT) and its coming split-up could leave its snack division in a better position to make strategic moves to bolster its business. Diamond Foods has no time to waste on internal wrangling, but unfortunately, it's hard to imagine the company making a full recovery in its current state.

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