3 Predictions for This Week
I went out on a limb last week, and now it's time to see how things played out.
- I predicted that Apple (NAS: AAPL) would close out the abridged trading week higher. After hitting an all-time high on Wednesday of the prior week, the world's most valuable tech company posted significant drops on Thursday and Friday. I didn't see it as a correction. The fundamentals were only continuing to improve. I got some help this week when not one but two analysts suggested that Apple will hit $1,000 sooner rather than later. Apple shares closed 5.7% higher on the week. I was right.
- I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI) . 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. Well, the first week of the second quarter saw the market taking a breather. Despite Apple's ascent, Nasdaq delivered a 0.4% loss on the week, but the Dow surrendered 1.1% of its value. I was right.
- My final call was for A. Schulman (NAS: SHLM) to beat what Wall Street analysts were projecting on the bottom line in its latest quarter. Well, the supplier of plastic compounds and resins came through with an adjusted profit of $0.38 a share. The market was banking on $0.44 a share. I was wrong.
Two 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. Nokia will close out the week higher
Several years ago, Nokia (NYS: NOK) was on top of the world as the biggest handset manufacturer. The world was going wireless, and they were doing it preferably through Nokia devices.
Well, the transition from old-school feature phones to modern smartphones hasn't been kind to the Finnish company. The world wants iPhones and Android smartphones. Everything else is collecting dust. Nokia's stock has spent the past year and change in the single digits. Five years ago it was peaking in the $40s.
Its best shot at a return to relevance begins with today's debut of Nokia's Lumia 900. As the flagship handset of the Windows Phone mobile operating system, there's plenty of marketing muscle behind this phone. Nokia also claims that it will be generating billions in payments just for supporting the fledgling Windows Phone platform.
Nokia is trading too close to an all-time low to ignore. It's not going away, as its cash-rich balance sheet and reasonable yield should support the stock here. My thesis for Nokia's move higher rests on the buzz that the Lumia 900 will generate in its first week on the market.
2.The Nasdaq Composite will once again beat the Dow this week
Betting on tech over stodgy blue chips has been a steady bet for me all year. Why stop now? Earnings season is just around the corner, and investors are still favoring tech over blue chips.
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. Titan Machinery will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
Titan Machinery (NAS: TITN) oversees nearly 100 dealerships that sell agricultural and construction equipment across the country. It even has a few stores in Romania and Bulgaria. If there's a farm to be tended to or a building going up, Titan's scattered network of dealerships would love to be a part of the process.
If analysts say that the company earned $0.52 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. Even though the economy is improving -- and demand for Titan's machinery should be on the rise -- there's no such thing as a perfect company. Analysts see Titan earning less than the $0.57 a share it earned a year ago, even though they do see a healthy 18% uptick on the top line.
Everything 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 Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and Nokia and creating a bull call spread position in Apple. 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 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.