Schaeffer's Trading Floor Blog

Stocks at New Lows: The St. Joe Company and Diamond Foods

JOE and DMND both fell to new lows in today's trading

by 11/7/2011 2:29 PM
Stocks quoted in this article:

We've got a mixed bag of new highs and lows in today's trading, echoing the roller-coaster price action in the major market indexes. The NYSE reports 36 securities at fresh 52-week peaks, compared to just 14 stocks at annual lows. On the other hand, the Nasdaq tallies just 24 annual highs, along with 40 new lows. Among the equities slipping to bearish technical milestones in today's trading are beleaguered real estate issue The St. Joe Company (JOE - 12.91) and snack-food specialist Diamond Foods, Inc. (DMND - 38.81).

JOE price chartLooking first at JOE, the shares tumbled to an intraday nadir of $12.72 -- a 13-year worst. The stock has shed roughly 39% of its value in 2011, and is now lingering several points below resistance at its 10-week and 20-week moving averages. This trendline duo has pressured JOE southward since mid-April. Unfortunately, JOE's third-quarter earnings report -- released after the close of trading last Thursday, Nov. 3 -- only served to exacerbate the stock's slide.

In light of JOE's technical troubles, it's no surprise to find that the stock has become a favorite target of the shorts. Despite an 8.7% decline over the past month, short interest still accounts for a notable 20.8% of the equity's float, or 32.1 times JOE's average daily trading volume.

DMND price chartElsewhere, DMND fell to a session low of $38.45, in territory the stock hasn't explored since October 2010. The shares have been reeling since last Wednesday, after DMND warned that its much-anticipated acquisition of Pringles from Procter & Gamble (PG) could be delayed by an internal investigation. As a result of its steep pullback, the stock is now sitting on a 2011 deficit of 12.7%.

Going forward, DMND's downtrend could potentially be accelerated by a round of bearish brokerage notes. The stock's average 12-month price target stands at $83, according to Thomson Reuters -- representing a hefty 79% premium to Friday's close at $46.40.


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