Diamond Foods, Inc. (NASDAQ: DMND)
Diamond Foods, Inc. (DMND), a snack product company yesterday announced that they have reached an agreement in which Snyder’s Lance will acquire all outstanding shares of Diamonds Foods. The cash and stock merger acquisition approximately totals $1.91 billion.
Diamond Foods, Inc. CEO Comments
“The combination of Diamond and Snyder’s-Lance provides the opportunity to create significant value for our stockholders and offers immediate benefits for consumers,” said Brian J. Driscoll, President and Chief Executive Officer of Diamond Foods. “This transaction will create a diversified, branded snacking portfolio with greater operating scale. In addition, we expect the transaction will provide us with greater resources to further develop new product innovation and broaden our geographic reach and route to market across complementary customer bases. We are excited about the opportunities this combination will create for consumers and our stockholders.” PR Newswire
Comments from Snyder’s-Lance CEO :
“Diamond Foods is a clear industry leader with exceptional brands, and we’re excited to bring together these two highly complementary companies,” said Carl E. Lee, Jr., President and Chief Executive Officer of Snyder’s-Lance. “Diamond has excelled in delivering exceptional product quality and innovation across their entire product portfolio, with products and ideas that work perfectly alongside our Snyder’s-Lance brands. We plan to take full advantage of the combined sales forces of Snyder’s-Lance and Diamond to drive stronger top line growth than either company could achieve alone. Additionally, we will have an opportunity to grow internationally with Diamond’s existing European platform, bringing unique products to consumers in that market. By combining the resources and expertise of Snyder’s-Lance and Diamond, we expect to see widening profit margins with additional scale and an expanding line of our better-for-you products. We welcome the Diamond team to the Snyder’s-Lance family and look forward to winning together.” PR Newswire
DMND Technical Analysis
DMND gapped up in price yesterday to $37.13, up from the prior day’s close of $34.89, which is a 6% increase in price based on favorable news. Taking a look at the daily chart, we can see the last time the stock traded above this price level was all the way back on January 30, 2012 when the stock traded at $37.65. The stock’s current spike up began on October 20th when the stock closed at $30.65 which is a 21% increase in a matter of a week. The stock has a relatively low float of 26.39 million shares and is trading on over 13 times the normal daily trading volume. Both of these factors make the stock a good candidate for the gap and go strategy. The stock did reach pre market highs of $39.00 but gave back $1.87 at the open, or equivalent to 5%. For trading purposes, my entry point would have been $37.20 looking for a run up to $38. My stop loss would have been $37.00 fearing anything below that and the stock would start to fill in the gap up.
Diamond Foods, Inc. engages in processing, marketing, and distributing snack products; and culinary, in-shell, and ingredient nuts. The company operates in two segments, Snacks and Nuts. It offers potato chips, ready-to-eat popcorn, and snack nuts. The company sells its products under Diamond of California, Kettle Brand and KETTLE Chips, Emerald, and Pop Secret brand names. Diamond Foods, Inc. sells its products to global, national, regional, and independent grocery, drug, and convenience store chains, as well as to mass merchandisers, club stores, other retail channels, and non-retail channels through its sales force and wholesale distributors. The company operates in the United States, the United Kingdom, Canada, South Korea, Japan, Germany, and the Netherlands. Diamond Foods, Inc. was founded in 1912 and is based in San Francisco, California. Yahoo Finance