3 Predictions for This Week
I went out on a limb last week, and now it's time to see how that played out.
- I predicted that Green Mountain Coffee Roasters (NAS: GMCR) would close higher on Thursday. I was banking on a strong quarterly report out of the company behind the Keurig single-cup brewing platform, and I blew it. Green Mountain missed its own sales forecast, warning of slowing revenue growth for the balance of fiscal 2012. The stock shed nearly half of its value on the disappointing news, making this the worst of my weekly predictions since I began this column several months ago. I was wrong.
- I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI) . This was a consistent winning call during the first quarter, but the Dow 30 has won most of the early round this quarter. The Nasdaq got clobbered, shedding 3.7% of its value last week, while the Dow dropped only 1.4% on the week. I was wrong.
- My final call was for Whole Foods Market (NAS: WFM) to beat what Wall Street analysts were projecting on the bottom line in its latest quarter. Well, the leading organic grocery-store chain came through with strong results. Fueled by a 9.5% spike in comparable-store sales, Whole Foods blew past analyst projections on the top and bottom line. Whole Foods came through with a profit of $0.64 a share, well ahead of the $0.59 the market was forecasting. I was right.
One out of three? 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 will close higher on Wednesday
SodaStream (NAS: SODA) shed 11% of its value during the final two trading days of last week. Green Mountain was the culprit. Investors believing that Green Mountain's home-based beverage model was faltering took it out on SodaStream, too.
There has never been a reason to join the two companies at the hip. Each product offers an entirely different set of advantages outside of convenience.
Well, SodaStream will have a good shot at getting the last laugh when it reports its quarterly results on Wednesday morning. With misplaced pessimism baked in, bouncing back should be easy unless its quarter is as flat as its carbonated beverages aren't.
2.The Nasdaq Composite will beat the Dow this week
Betting on tech over stodgy blue chips was a steady winning bet for me earlier this year. Investors have nervously been rotating out of the tech bellwethers, but it's just a matter of time before they come back. Tech is where the growth is.
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. Priceline will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others. When it comes to online travel, priceline.com (NAS: PCLN) is the market darling. The "name your own price" giant continues to grow faster than the competition, and these days the company is generating more gross bookings overseas than it is closer to home.
If analysts say the company earned $3.94 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. Priceline's Booking.com is attracting big business in Europe, and that entire region is on iffy economic ground. Any hiccups in the recovery, and travel plans will go the wrong way.
However, there are no signs that Priceline is slowing down. Everything still seems to be falling into 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 The Motley Fool owns shares of SodaStream International, Whole Foods Market, and priceline.com.Motley Fool newsletter serviceshave recommended buying shares of Whole Foods Market, SodaStream International, priceline.com, and Green Mountain Coffee Roasters and creating a lurking gator position in Green Mountain Coffee Roasters. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.Longtime Fool contributorRick Munarrizcalls them as he sees them. He owns shares of Green Mountain Coffee Roasters and is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.