KeyBanc Sees The End in Sight for Diamond Foods (DMDN) Issues
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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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Diamond Foods (NASDAQ: DMND) analyst Akshay Jagdale at KeyBanc, who was credited with Friday's 50 percent surge in the stock, issued new comments on the stock this morning in a report entitled "DMND: Finally an End in Sight; Reiterating BUY."
On the 10-Q delay, he said it was expected. Audit Committee anticipating being able to conclude its investigation by the middle of February 2012.
Jagdale said while they hoped the investigation would be completed earlier, they view the mid-February completion date as reasonable. "We are glad to see a completion date, albeit a little later than we thought, because it removes uncertainty regarding timing," he said.
He continues to believe the investigation will reveal that the company has properly accounted for the various payments it makes to its growers. He also continues to believe that the Pringles deal will go through. On December 12, Procter & Gamble told Jagdale that it was not surprised by DMND's announcement to delay its 10Q filing and P&G remains committed to completing the Pringles deal.
Jagdale said he would not would not read into the mid-February deadline negatively. He notes that the mid-February completion date implies roughly three months from start to completion. While shares were weak yesterday on this, Jagdale noted that Green Mountain Coffee (Nasdaq: GMCR) took close to to three months (80 days) to complete its internal investigation as well.
Keybanc notes that its third-party consultant, Robert Willens, was was not surprised by yesterday's announcement. "Furthermore, Mr. Willens continues to believe that the ongoing investigation will reveal that DMND has properly accounted for the various payments it makes to its growers and there is minimal risk of restatements related to payments to wlnut growers."
Regarding the risk of restatements, Mr. Willens notes, "The only thing, in my view, that could lead to a restatement is a finding that the contract has somehow been amended, superseded, or abrogated and that the accounting for the payments to the growers does not reflect the terms of the contract as so amended, superseded, or abrogated, in my view a highly unlikely occurrence."
With shares of Diamond Foods down 66% since September 20, the firm is reiterating its Buy rating and $76 price target.
For an analyst ratings summary and ratings history on Diamond Foods click here. For more ratings news on Diamond Foods click here.
Shares of Diamond Foods closed at $31.30 yesterday.
On the 10-Q delay, he said it was expected. Audit Committee anticipating being able to conclude its investigation by the middle of February 2012.
Jagdale said while they hoped the investigation would be completed earlier, they view the mid-February completion date as reasonable. "We are glad to see a completion date, albeit a little later than we thought, because it removes uncertainty regarding timing," he said.
He continues to believe the investigation will reveal that the company has properly accounted for the various payments it makes to its growers. He also continues to believe that the Pringles deal will go through. On December 12, Procter & Gamble told Jagdale that it was not surprised by DMND's announcement to delay its 10Q filing and P&G remains committed to completing the Pringles deal.
Jagdale said he would not would not read into the mid-February deadline negatively. He notes that the mid-February completion date implies roughly three months from start to completion. While shares were weak yesterday on this, Jagdale noted that Green Mountain Coffee (Nasdaq: GMCR) took close to to three months (80 days) to complete its internal investigation as well.
Keybanc notes that its third-party consultant, Robert Willens, was was not surprised by yesterday's announcement. "Furthermore, Mr. Willens continues to believe that the ongoing investigation will reveal that DMND has properly accounted for the various payments it makes to its growers and there is minimal risk of restatements related to payments to wlnut growers."
Regarding the risk of restatements, Mr. Willens notes, "The only thing, in my view, that could lead to a restatement is a finding that the contract has somehow been amended, superseded, or abrogated and that the accounting for the payments to the growers does not reflect the terms of the contract as so amended, superseded, or abrogated, in my view a highly unlikely occurrence."
With shares of Diamond Foods down 66% since September 20, the firm is reiterating its Buy rating and $76 price target.
For an analyst ratings summary and ratings history on Diamond Foods click here. For more ratings news on Diamond Foods click here.
Shares of Diamond Foods closed at $31.30 yesterday.
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