With half of 2012 in the record books, it's important to take a look at whether the stocks that interest you can live up to their full potential. By making sure you know about a company's future plans and possible challenges, 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). As we saw in our look at Diamond Foods earlier this month, the snack-food maker has been mired in controversy, with the departure of its executive leaders and a commitment to restate two years of financials. With all that uncertainty, does the stock have any chance of bouncing back? Let's take a quick look at its prospects for the rest of the year and beyond.

Stats on Diamond Foods

Average Stock Price Target $33.67
Fiscal 2012 EPS Estimate $1.69
Fiscal 2013 EPS Estimate $2.25
Fiscal 2012 Sales Growth Estimate 3.9%
Fiscal 2013 Sales Growth Estimate 74.6%
CAPS Rating (out of 5) **

Source: Yahoo! Finance.

Can Diamond Foods get its shine back?
From one perspective, so many bad things have happened to Diamond Foods that it may seem there's nothing left that could happen. Between ousting its CEO and CFO, missing out on the Procter & Gamble (NYSE: PG) Pringles acquisition to Kellogg (NYSE: K), and suspending its dividend in March, the company is now in danger of getting itself delisted from the Nasdaq, with a hearing scheduled for today.

But with so little known about the company's true financial condition, it's hard to rule out even worst-case scenarios for Diamond Foods. Granted, the shares have already priced in a big contraction in earnings, but even so, it's not as if there isn't more room to fall if things don't even turn out as well as beaten-down expectations suggest.

Meanwhile, the worst thing for Diamond Foods is that its competitors continue to move forward. Kraft Foods (NYSE: KFT) will split its businesses in two soon, allowing its snack business to gain new focus and potentially make some big strategic moves. Meanwhile, PepsiCo (NYSE: PEP) will continue to work hard to defend its status atop the snack industry, especially in light of Kellogg's challenge.

Diamond Foods probably won't move much until it gets around to providing restated financials. Whether that happens this year or next remains to be seen, but investors have already lost patience with the company.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.