FR: Don’t Go Nuts Over Diamond’s Recent Fall

Article: Don’t Go Nuts Over Diamond’s Recent Fall

My next “Fool Revisited” piece is a look back at how we covered the news while working for The Motley Fool, this time on the occasion of a massive fall for Diamond Foods, a seller of delicious snack foods that has since been acquired by Snyder’s-Lance (Nasdaq: LNCE).

While The Motley Fool has been known to break news from time to time, they default to taking a long-term view of the market, not really covering the day-to-day price movements of every single stock out there. This doesn’t mean that they don’t report on daily moves, however. They had a group of writers that would write articles when any of the stocks recommended by their services went up or down over 5% in a single day, and they also started publishing articles about the end of the market day news from the Dow Jones and S&P 500.

My article wasn’t covered under the above criteria. It doesn’t appear that Diamond Foods was an active recommendation at the time, and it wasn’t part of the S&P 500 either. However, when a stock moves over 20% during the course of the week, some people will check out the ticker on the various websites to see what was going on, and it was good to get something out there in an attempt to take a place in that article role while the company was in the news for a couple of days.

It was a relatively low-covered stock if I remember correctly, but anytime you have accounting improprieties, it tends to get peoples’ attention, and you want to let them know what is going on. In the case of a massive decline, you want to tell potential investors if this is something that make it a buying opportunity – it’s a short-term set back and the share price will recover – or if it is something that speaks to the long-term health of the company. In the case of Diamond Foods, the accounting issues scuttled the deal for Pringles mentioned in my article, led to a settlement with the SEC in 2014, and resulted in its ultimate sale to Snyder’s-Lance, which itself has been purchased by Campbell Soup Company (NYSE: CPB).

Life moves fast in the snack business apparently.

Until next time…

Disclaimer: I do not own currently own shares in any of the mentioned companies, and I have no plans to purchase shares of any company within the next 60 days in any account in which I manage investment funds. You can read a little about my personal investment philosophy here.

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