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Is Diamond Foods the Next General Mills?

Wall Street fiends for growth stocks, whether secular or cyclical. But according to Cramer, even among these groups there are two other subsets to watch: senior and junior.

Senior growth stocks comprise those mid- to large-cap companies that are household names. The junior growers are small-cap businesses with a market cap less than $2 billion. Investors buy the latter on the expectation that they will one day become the former.

Diamond Foods is definitely the latter. And Cramer likes it because he thinks it’s the next General Mills . He said it still has a lot of room to run, and that should translate into multiyear gains for shareholders.

One concern here, though, is the short interest in Diamond: Thirty-eight percent of its shares are sold short. So far the bulls have won the battle taking place in this stock—DMND is up 15 percent since Cramer last spoke with the CEO on Oct. 15—but even the slightest mistake by this company could kill the share price. Some people might remember Diamond took a hit last quarter because the Street misunderstood the guidance that was offered, even though it was pretty bullish.

So, will Diamond Foods in fact be the next General Mills? Cramer tapped CEO Michael Mendes to find out. Watch the video to see the full interview.

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