5 Things to Watch This Week: Red Hat, Houses, Drugs, TVs and Window Dressing

There's never a dull moment on Wall Street. Let's go over some of the items that will help shape the week that lies ahead.

1. Best Buy can live up to its name: How good or bad was Best Buy's (BBY) holiday quarter? We'll find out for sure Thursday when the consumer electronics retailer posts its latest financial results.

There are plenty of reasons to be apprehensive. The superstore chain has seen its reputation smacked around in recent months. First, there was the Thanksgiving weekend snafu. A lot of people who thought they were scoring great deals through BestBuy.com were told weeks later that the retailer would not be honoring those orders.

Then there was a scorching Forbes article in January that took the company's store experience to task. The writer complained about the aggressive tactics in promoting add-on services and insurance protection. CEO Brian Dunn responded publicly on the Best Buy blog, and that only made things worse.

The hubbub has quieted down, but all of the nightmares in recent months will be revisited if Best Buy cranks out a disappointing quarterly report.

2. Heading out to the corner drugstore: Walgreen (WAG) reports on Tuesday, but the pharmacy chain also has its own painkiller to prescribe.

Walgreen warned earlier this month that its prescription orders fell 10% in February after it lost its contract with Express Scripts (ESRX). Walgreen stands to miss out on $4 billion in revenue and more than 80 million prescriptions this year as a result of the split.

Walgreen also warned of weakness as a result of a mild flu season. That's good news for you but bad news for Walgreen.

3. The Linux penguin strikes again: Red Hat (RHT) checks in on Wednesday.

Most people aren't familiar with Red Hat, but businesses know the enterprise software company all too well. Red Hat provides business software based on the Linux open-source platform. Yes, open source is free, but Red Hat provides solutions and support to corporations at cheaper prices than traditional enterprise software.

Analysts see Red Hat earning $0.27 a share, just ahead of the $0.26 a share it delivered a year earlier.

4. Wall Street window dressing: It's that time of the quarter again. Friday is the final trading day of the first quarter, and that will find some -- though thankfully not most -- fund managers scrambling to shore up their portfolio holdings.

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The practice of "window dressing" consists of fund managers dumping losers and buying some of the market's hottest performers. When the quarterly performance reports go out, fund holders will see that the managers were smart enough to own the hot stocks.

There's a fatal flaw to window dressing, of course. Investors aren't stupid. They can see how the fund actually performed during the period. There are plenty of websites and publications that can compare a fund's performance relative to its peers.

There haven't been any recent studies on how common window dressing is these days. One would think that the information age should make the practice obsolete. However, it probably still happens to some extent. Just keep that in mind as you review your fund performance reports when they're issued for the March quarter in a few weeks.

5. If you build it they will move: Homebuilder Lennar (LEN) reports on Tuesday.

The housing market is showing signs of life, and Lennar is likely to post its eighth consecutive quarterly profit. Yes, even a developer hailing from the battered real estate market of Miami has been in the black for two years.

Analysts do see Lennar posting a narrower profit than it did a year earlier but on a healthy 26% surge in revenue.

Some of the key metrics to watch as you go over the report are order cancellations and the backlog of new homes that have yet to be delivered.

These are certainly interesting times for the real estate developers. The economy is showing signs of life, but there's also the matter of rising interest rates. Mortgage rates have risen above 4% for the first time since late October.

This is important because as mortgage rates move higher the value of a home that a potential homebuyer can afford goes down. If prices of existing homes move lower it will make it that much harder for Lennar and its peers to move new homes at current prices.

Then again, there's always renting.

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of Best Buy.