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 Apple would close higher on the week. I figured Tuesday's iPad event would bring out the bulls. I have my concerns about tomorrow's quarterly report, but I still thought Apple could have a strong run as everyone talks up Apple's latest gadgetry. The stock closed out the week 3.4% higher. 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 good week for stocks all around. The Nasdaq moved 0.7% higher, but it lost out to the Dow and its 1.1% gain. I was wrong.
- My final call was for Broadcom to beat Wall Street's income estimates in its latest quarter. The provider of semiconductor solutions for wired and wireless communications had consistently beaten bottom-line expectations over the past year, and I was banking on a repeat performance. Broadcom posted net income of $0.76 a share, well ahead of the $0.69 the pros were forecasting. The stock sold off on a weak top-line outlook, but it still registered a beat. 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. SodaStream will close higher on the week
SodaStream reports on Thursday, and it's easy to be optimistic. Making carbonated beverages at home is no longer considered a faddish novelty, and SodaStream is the undisputed leader in this growing niche. Analysts see revenue climbing 29% for the quarter, and you just don't see that from the branded soda giants.
SodaStream shares are in a good place to rally. They have sold off since their summertime peak, when buyout rumors were swirling like sweet syrup in a cup of fresh seltzer.
My first call is for SodaStream 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, even if many of the tech reports coming up this week could prove challenging. This is the time for 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. SunPower will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
SunPower is a leading provider of solar-energy equipment. Unlike many of the other players in this volatile field, SunPower is actually profitable. It's been able to deal through the cyclical swings in solar, bouncing back when other energy sources spike in cost or when it seems as if the global economy is ready to start subsidizing solar-power initiatives.
Another thing it does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $0.25 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. Analysts see a 10% decline in revenue this quarter, and calling for expanding margins is a brave bet when the top line is going the other way.
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 the New Week originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz owns shares of SodaStream. The Motley Fool recommends and owns shares of Apple and SodaStream. 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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