3 Predictions for This Week
I went out on a limb last week and came out with mixed results.
- I predicted that shares of Barnes & Noble (NYS: BKS) would miss Wall Street's earnings estimates. Analysts typically are conservative in their targets, so this may seem like a gutsy call on the surface. However, the pros have been consistently coming up short on the bookseller for the past year. Backing out one-time hits, Barnes & Noble earned $0.99 a share, ahead of the $0.92 a share that the market was expecting. I was wrong.
- I predicted that the tech-heavy NASDAQ (INEX: ^IXIC) would outperform the Dow Jones Industrial Average. It's been a strong year so far for tech stocks relative to the more diversified blue chips that make up the 30 Dow components. NASDAQ clocked in with a 0.4% gain, just besting the Dow's 0.26% uptick. I was right.
- My final call was for Dollar Tree (NAS: DLTR) to land ahead of the pros on the bottom line. Well, the dollar-store giant came through. Dollar Tree's quarterly net income of $1.60 a share was just enough to beat out the pros parked at $1.59 a share. I was right.
Two for three? I know that I can do better than that.
Let me once again whip out my trusty, dusty, and occasionally accurate crystal ball to make three calls that may play out over the next few trading days.
1. SodaStream shares will rise on Wednesday
SodaStream (NAS: SODA) reports its quarterly results on Wednesday morning.
The Israeli company behind the popular home-based soda maker has been inching higher lately. The stock surged nearly 11% higher last week, but a move like that isn't always as encouraging as it sounds. Investors are piling in ahead of the report, discounting a lot of the potential good news.
Still, SodaStream still has room to run if it was as big a hit during the holidays as bulls believe.
2. The NASDAQ Composite will once again beat the Dow this week
I'm not superstitious, but there's little reason to veer from this pick that has panned out successfully for me every single week so far through 2012. Yes, NASDAQ has beaten the Dow 30 every single week this young year.
The market is ripe for the tech-stacked secondary stocks to continue to outpace the 30 megacaps that make up the Dow Jones Industrial Average.
3. AutoZone will beat Wall Street's earnings estimates
It pays to keep your car in shape. AutoZone (NYS: AZO) has been an all-weather winner in recent years. Car owners may not feel comfortable enough to splurge on new vehicles, so they're making sure they invest in keeping their aging vehicles running. As long as folks need to drive, AutoZone is going to be doing fairly well.
If analysts say the company earned $4.04 a share in its latest quarter, I'll whip out a "greater than" sign. History's on my side!
One of my best tricks to beating the market is finding stocks that perpetually land ahead of the prognosticators. Let's go over the past year of earnings reports.
Source: Thomson Reuters.
Things can change, of course. Automakers are showing signs of life, and industry analysts see a strong year for new-car sales. However, AutoZone held up nicely even during the "Cash for Clunkers" rebates that encouraged drivers to turn in their old gas guzzlers for more fuel-efficient rides.
Everything seems to be falling in place for another strong quarter on the bottom line.
Three for the road
Well, there are three predictions right there. Let's see how I fare this week.
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At the time this article was published Motley Fool newsletter serviceshave recommended buying shares of SodaStream International. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Longtime Fool contributorRick Munarrizcalls them as he sees them. He owns no shares in any of the stocks in this story and is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has adisclosure policy.
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