3 Predictions for Next Week
I went out on a limb last week, and now it's time to see how that decision played out.
- I predicted that BlackBerry would close out the week lower. Despite Wednesday's BlackBerry 10 event, the shares had nearly tripled heading into the event. The buzz and hype were unsustainable. I nailed it. The old "sell on the news" adage proved resilient. My suggestion a week earlier to sell as BlackBerry shares were peaking above $18 proved to be a valuable one for anyone who listened. Shares of BlackBerry plunged 26% on the week. I was right.
- I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. . This has been a tricky call lately, so how did it play out this time? It was close. Nasdaq closed 0.9% higher. The Dow, on the other hand, clocked in with a gain of 0.8% on the week. I was right.
- My final call was for MasterCard to beat Wall Street's quarterly profit target. The leading credit card marketer has been consistently charging ahead of the prognosticators, and there was little reason to bet against that trend as shoppers hit the malls during the holidays. Analysts were looking for a profit of $4.81 a share. MasterCard came through with net income of $4.86 a share. I was right.
Three out of three? Awesome!
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. LeapFrog will close out the week higher
LeapFrog Enterprises reports on Wednesday. Analysts see the maker of popular electronic educational toys matching the $0.49 a share it earned during last year's holiday quarter.
That seems to be a conservative bet. LeapFrog's product line dominated the lists of hottest sellers this past holiday shopping season. Some of the traditional toy manufacturers are struggling these days as players turn to apps and other diversions, but LeapFrog is all over that revolution with its kid-friendly tablet.
LeapFrog also aims for a younger crowd, and parents enjoy buying playthings that will develop their children's abilities.
My first call is for LeapFrog to close the week higher.
2. The Nasdaq Composite will beat the Dow this week
Betting on tech over stodgy blue chips was a steady winning bet for me last year. This has been a losing bet 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, and the results this earnings season aren't as bad as some worrywarts feared. 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. OpenTable will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
OpenTable is the leading provider of online reservations to the fine dining establishments that take them. Yet there's no shortage of naysayers. Skeptics argue that restaurants will turn to cheaper solutions, refusing to pay for OpenTable's direct leads in exchange for a set amount based on the number of seated patrons.
However, every passing quarter finds more and more restaurants hopping on the platform -- and the average eatery filling even more of its open tables through OpenTable.
Another thing OpenTable does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $0.43 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.
Things can change, of course. Folks could start eating out less. They could trade down to cheaper chain restaurants. There's also the eventual possibility that another platform comes along that's more effective than OpenTable in helping high-end restaurants attract foodies. However, there are no signs that we consumers are turning our backs on fine dining.
Everything seems to be falling into place for another market-thumping 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 Next Week originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends LeapFrog Enterprises and OpenTable and owns shares of LeapFrog Enterprises and MasterCard. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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