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 Sirius XM Radio would close higher on the week. The satellite-radio provider was reporting quarterly results on Tuesday, and all of the trends appeared favorable heading into the earnings call. Sirius XM didn't post amazing results, but it did raise its free cash flow guidance. It also revealed that it's been aggressively buying back shares. The company went on to hit a five-year high shortly after the report. 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? Well, the market had a strong run this week, fueled by encouraging economic news. Secondary stocks led the way, with the Nasdaq soaring 3% on the week. The Dow managed to close just 1.8% higher. I was right.

• My final call was for Sturm, Ruger to beat Wall Street's quarterly profit target. The firearms maker has been posting blowout quarterly results as consumers snapped up weaponry ahead of any potential gun-control legislation. Analysts were looking for a profit of $1.01 a share during the quarter, and it came through with net income of $1.20 a share. I was right.

Three for three? Awesome! That's six for six over the past two weeks! I'm at an encouraging 10 of 12 over the past four weeks.

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. Clean Energy Fuels will close higher on the week
Clean Energy Fuels reports quarterly results on Wednesday. The provider of natural gas fuel for transportation has been building out a growing network of fueling stations for compressed natural gas and liquefied natural gas. This is clearly a promising niche. Natural gas is a much cheaper fuel source than petroleum.

Yes, Clean Energy is losing money. However, deficits have been narrowing with every passing quarter, and business is booming. Analysts see revenue climbing 35% in Wednesday's report.

All of the ingredients are in place for another encouraging report. My call here is for shares of Clean Energy Fuels to movie higher on the week.

2.The Nasdaq Composite will beat the Dow this week
Tech has been a big winner in recent years, so betting on tech over stodgy blue chips has been a good bet for me more often than not.

I'm going to stick with this pick. Most of the names in the composite are just too cheap at this point, and tech should be what carries us through the economic recovery. 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. Compass Diversified will beat Wall Street's earnings estimates
Some stocks are just flat out better than others.

Compass Diversified Holdings owns several middle-market businesses. From printed circuit boards to gun safes -- from upholstered furniture to personal hydration products -- Compass lives up to the "Diversified" in its moniker.

Another thing it does is make analysts look like perpetual underachievers. If analysts say that the company posted a profit of $0.36 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. With so many moving parts, any of Compass Diversified's eight businesses can bump into turbulence. The motivation to keep its impressive high yield sustainable may force the company into taking risky chances that don't pan out.

However, it's hard to argue against the trend. 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 Munarriz has no position in any stocks mentioned. The Motley Fool recommends Clean Energy Fuels and owns shares of Sturm, Ruger. 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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