3 Predictions for This Week
The iPhone 5 launch on Wednesday, Sept. 12, is sure to be the most important event for tech investors this year. The Motley Fool will be hosting a live chat where our top tech analysts will answer your questions and break down what the announcement means for Apple and tech investors everywhere. Be sure to swing by Fool.com at 12:45 p.m. ET next Wednesday for all your coverage of Apple's next big announcement.
I went out on a limb last week, and now it's time to see how that decision played out.
- I predicted that Quiksilver (NYS: ZQK) would miss analyst profit projections. The retailer of apparel, footwear, and accessories with an extreme-sports bent had come up short in each of its four prior quarters, so this call seemed like a safe bet. Wouldn't you know it? The surf-and-turf retailer came through with net income of $0.09 a share, nearly twice the $0.05 the pros were expecting. I was wrong.
- I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI) . This has been a winning call lately, as faster-growing tech stocks outpace the Dow's 30 blue chips. The market was kind this short week, with the tech-heavy Nasdaq climbing 2.3% higher. The Dow managed to grow by a little less than 1.7%. I was right.
- My final call was for Dollar General (NYS: DG) to beat Wall Street's profit target. The thrift-store operator has been cashing in on penny-pinching shoppers who flock to its deeply discounted wares, as it surpassed estimates routinely over the past year. Well, it happened again. Dollar General served up a quarterly profit of $0.69 a share, well ahead of the $0.64 the pros were forecasting. I was right.
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. Apple shares will close out the week higher
"Buy on the rumor, sell on the news" is an old Wall Street adage. By that logic, investors would buy into Apple (NAS: AAPL) ahead of its announcement of the iPhone 5 on Wednesday, only to sell off the stock after the news.
I don't see things playing out that way. Yes, that's the way many -- though not all -- of Apple's iPhone introductions have played out, but the iPhone 5 is a radical departure by most accounts. It should turn heads. It should crack open pocketbooks.
After seeing the competition spend the past few days introducing shiny new smartphones, Apple gets the last word. I'm saying that it also gets the last laugh. Apple will close out the week ahead with an overall gain.
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. This has been a losing pick lately, but I still think technology is the best sector to be invested in these days.
I'm going to stick with this pick. Most of the names in the composite are just too cheap at this point. 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.Globecomm will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
Globecomm (NAS: GCOM) is a provider of satellite-based managed network solutions. We've seen plenty of stumbles this year from companies that provide communication and networking solutions, but Globecomm is thriving. Wall Street sees the company growing its revenue and earnings by 37% and 57%, respectively, in the fiscal year that ended earlier this summer.
Another thing it does is make analysts look like perpetual underachievers. If analysts say that the company earned $0.20 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. Globecomm could snap this welcome streak of three consecutive quarters of delivering blowout bottom-line results. However, there are no signs the company will fumble this quarter to the point of failing to live up to Wall Street estimates. 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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The article 3 Predictions for This Week originally appeared on Fool.com.The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and creating a bull call spread position in Apple. 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. The Motley Fool has adisclosure policy.