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 Best Buy would close lower on the week. The consumer-electronics retailer had hit a new 52-week high heading into the report, and it didn't seem justifiable given the declining sales and cascading margins. Best Buy's quarterly report on Tuesday was mixed, and while there were a few positives in there, the market ultimately agreed with me. Why is a fading retailer trading at new highs? The stock fell 3.2% 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? Well, the market finally took a breather this week, and secondary stocks led the way down, with the Nasdaq shedding 1.1% on the week. The Dow managed to close just 0.3% lower. I was wrong.

• My final call was for PetSmart to beat Wall Street's income estimates in its latest quarter. The pet supplies and services provider has been posting blowout quarterly results over the past year, and I was banking on a continuation of the trend. Analysts were looking for a profit of $0.96 a share during the quarter, and it came through with earnings of $0.98. I was right.

Two out of three? I'll take it! That makes me 13 out of 15 over the past five 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. Sirius XM will close lower on the week
Sirius XM Radio has been one of my favorite stocks and one of the market's best performers over the past four years. The satellite-radio provider also happened to close out the week at a price of $3.58, and that's the media giant's highest closing price in more than five years.

These are interesting times for premium radio. Two weeks ago we saw the world's largest online advertiser jump into this market, and this week we saw the two biggest streaming services beef up their platforms.

Sirius XM's long-term potential is strong. I remain a bull. However, the new closing high at a time when the market for premium audio is getting a bit crowded makes me worried about the near-term direction here. My call is for shares of the company to move lower 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. Costco will beat Wall Street's earnings estimates
Some stocks are just flat out better than others.

Costco is the market darling when it comes to warehouse clubs. Despite the retirement of its longtime CEO, the bargain-minded retailer hasn't skipped a beat.

Another thing it does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $1.03 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. Costco increased its annual membership fees in late 2011, and customers accepted the 10% increase, but you never know about the flexibility of shopper loyalty. Traditional grocers and discount department-store chains have also moved to offering more bulk-sized bargains.

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.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

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 Costco and PetSmart and owns shares of Costco. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.