3 Predictions for the New Week
I went out on a limb last week, and now it's time to see how that decision played out.
- I predicted that Tesla Motors would close lower on the week. The electric-car maker has been one of this year's hottest stocks, but I thought it was due for a breather at one of its charging stations. The stock did rally on Monday but then headed lower before rallying on Friday. It closed out the week 1.3% lower. 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, this was a mixed week for stocks. The Nasdaq moved 0.4% lower, losing out to the Dow and its 1.1% gain. I was wrong.
- My final call was for Costco to beat Wall Street's income estimates in its latest quarter. The warehouse-club operator has been an all-weather champ through thick and thin, and it has also been consistently beating bottom-line expectations. I was banking on a repeat performance, but Costco didn't come through. I was wrong.
One 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. Advanced Micro Devices will close higher on the week
Advanced Micro Devices is moving beyond its microprocessor stronghold. AMD chips will power all three of the major gaming consoles when the Xbox One and PS4 hit the market next month.
AMD is also reporting earnings on Thursday, and it should be a good one. It has been posting narrower deficits than Wall Street has been expecting over the past three quarters, and this time these same analysts see AMD returning to profitability. That would be a big event for AMD -- and its shareholders.
My first call is for this AMD to move 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, much to the disdain of regular readers who would love to see something different in this slot. It's earnings season, and this is the time for the Nasdaq's growth stocks to shine. 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. SanDisk will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
SanDisk is the leading player in flash memory. From digital cameras to a growing number of smartphones and tablets, a lot of the new tech toys are hungry for reusable flash memory cards. SanDisk's leading the way with the cost advantages and distribution prowess that improve a market leader's chances.
Another thing it does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $1.31 a share in its latest quarter, I'll argue that it held up better than that. 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. SanDisk has run into challenging cycles in which cutthroat competition smack margins. The trend that has favored Android devices with flash memory card slots can also move back to more of the closed platforms that dominated the market before.
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.
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Well, there are three predictions right there. Let's see how I fare this week. Meanwhile, remember that 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 the New Week originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Costco Wholesale and Tesla Motors. 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.