Canaccord Genuity Morning Coffe on Diamond Foods (DMND): Once You Pop, You Can’t Stop
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Price: $37.56 --0%
Rating Summary:
3 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
3 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffe on Diamond Foods (Nasdaq: DMND): Once you pop, you can’t stop.
Canaccord analyst says, "Shares of Diamond Foods soared after it announced it is buying the Pringles brand from Procter & Gamble (NYSE: PG) in a move to triple the size of its snack food business. Diamond will pay $1.5 billion for Pringles, which has annual sales of approximately $1.2 billion, and will assume $850 million in Pringles debt. The deal signifies the end of P&G’s involvement in the food business as it has sold Jif peanut butter, Crisco, Sunny Delight and Folgers over the past few years. P&G is looking to focus its assets more strategically as it attempts to become more agile and improve supply chain efficiencies. After the announcement, analysts questioned CEO Robert McDonald about the future of other brands owned by P&G, but McDonald did not provide any indication that the company is looking to spin off any additional brands at this time. Diamond continues to grow its snack food business, as this, combined with its $615 million purchase of Kettle Foods makes it the second largest snack company in the world, behind Pepsi (PEP), who owns Frito-Lay. Pringles will give Diamond an increased presence internationally (Pringles are sold in over 140 countries) and will increase its U.S. sales by more than 100%. While Diamond does move into the number two spot in the snack market, a Janney Capital Markets analyst points out that it is still only about 10% of the size of Frito-Lays. He does note that the deal is a positive for the Pringles brand which had been “a bit of an orphan” at P&G and should be a better performer as part of a dedicated snack business."
Canaccord analyst says, "Shares of Diamond Foods soared after it announced it is buying the Pringles brand from Procter & Gamble (NYSE: PG) in a move to triple the size of its snack food business. Diamond will pay $1.5 billion for Pringles, which has annual sales of approximately $1.2 billion, and will assume $850 million in Pringles debt. The deal signifies the end of P&G’s involvement in the food business as it has sold Jif peanut butter, Crisco, Sunny Delight and Folgers over the past few years. P&G is looking to focus its assets more strategically as it attempts to become more agile and improve supply chain efficiencies. After the announcement, analysts questioned CEO Robert McDonald about the future of other brands owned by P&G, but McDonald did not provide any indication that the company is looking to spin off any additional brands at this time. Diamond continues to grow its snack food business, as this, combined with its $615 million purchase of Kettle Foods makes it the second largest snack company in the world, behind Pepsi (PEP), who owns Frito-Lay. Pringles will give Diamond an increased presence internationally (Pringles are sold in over 140 countries) and will increase its U.S. sales by more than 100%. While Diamond does move into the number two spot in the snack market, a Janney Capital Markets analyst points out that it is still only about 10% of the size of Frito-Lays. He does note that the deal is a positive for the Pringles brand which had been “a bit of an orphan” at P&G and should be a better performer as part of a dedicated snack business."
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