Diamond Foods, Inc.
) is set to report first-quarter fiscal 2014 results on Dec 5.
Last quarter, it posted a strong positive surprise. Let us see
how things are shaping up for this announcement.
Growth Factors in the Past Quarter
Diamond Foods cost containment and operational initiatives
have proved successful. The company's turnaround strategies such
as improving price realization, lowering underperforming SKUs and
reducing dependency on discounting have started producing
desirable results, as evident from improved margins and earnings
per share in fourth-quarter fiscal 2013. Moreover, Diamond Foods
expects future results to depict more sustained growth of its
brands, arising from product innovation and differentiation,
improved cost structure and rebuilding of healthy relationships
with walnut suppliers.
Our proven model does not conclusively project Diamond Foods
as likely to beat earnings this quarter. A stock needs to have
and a Zacks Rank #1, 2 or 3 to surpass earnings estimates.
However, that is not the case here due to the following
ESP for Diamond Foods is 0.00% since the Most Accurate Estimate
stands at 17 cents per share, which is in line with the Zacks
Zacks Rank #1 (Strong Buy):
Diamond Foods' Zacks Rank #1 increases the predictive power of
ESP. However, we also need to have a positive ESP to be confident
of an earnings surprise call. We caution against stocks with
Zacks Rank #4 and 5 (Sell-rated stocks) going into earnings
announcement, especially when the company is undergoing negative
Other Stocks to Consider
Diamond Foods is not the only firm we are looking up to this
earnings season. Our model shows that the following stocks have
the right combination to post an earnings beat:
Omega Protein Corp.
) with Earnings ESP of +16.00% and a Zacks Rank #1 (Strong
Five Below, Inc
) with Earnings ESP of +25.00% and a Zacks Rank #2 (Buy)
Rite Aid Corp.
) with Earnings ESP of +25.00% and a Zacks Rank #3 (Hold)
DIAMOND FOODS (DMND): Free Stock Analysis
FIVE BELOW INC (FIVE): Free Stock Analysis
OMEGA PROTEIN (OME): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
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