7 Reasons to Worry About Next Week

Mr. Market doesn't always like you.

I realize that the markets have been generally rallying over the past year. Lulls -- like the one we experienced in January -- have proven to be temporary. However, don't let the dot-com bubble lessons go unheeded. 

A decade ago this week, the Nasdaq 100 peaked. Many investors didn't realize that the market was topping until it was too late. A little caution would have served investors well, but so would simple reason, since many of the multibaggers at the time didn't have the fundamentals to back their lofty gains.

Today, Wall Street may be hopping, but there are still companies that have a long way to go before they truly bounce back.

Even as the economy shows signs of turning the corner, there are still plenty of companies posting lower earnings than they did a year ago. Let's go over a few of the pretenders expected to take a wrong turn on their bottom lines next week.

Source: Yahoo! Finance.

Clearing the table
Many more companies will post lower earnings next week, but these are just a few of the names that really jump out at me.

Let's start with Eldorado. The gold miner with interests in Turkey, Brazil, and Greece branched out into Australia last year with its acquisition of Sino Gold. Eldorado also has stakes in iron ore. Gold prices have been strong in recent years, yet analysts still see the miner earning roughly one-third of what it did a year ago.

China Finance Online and Focus Media are both Chinese leaders in their respective niches. China Finance Online arms individual investors with premium research on Chinese equities. Focus Media specializes in real-world advertising, watching over a huge network of elevator poster frames, television monitors in well-trafficked areas, and even a movie-theater marketing network.

Chinese stocks are hot, right? The Chinese economy is moving at a headier pace than the rest of the world, so advertisers must be paying up to reach audiences, right? We will have answers to both questions next week -- but analysts seem to believe that the answer is "wrong" on both fronts.

Universal Display is a cutting-edge company, licensing its OLED technology to consumer electronics manufacturers making brighter and more efficient screens. TV, computer monitors, and even smartphones come in OLED flavors, but they have yet to catch on with the masses. It's telling that Universal Display was recommended to Motley Fool Rule Breakers newsletter service subscribers nearly five years ago, but has yet to turn a quarterly profit. The surprise here is that Universal Display's stock has easily beaten the market in that time.

Nike is hurting, and this has nothing to do with being one of the few sponsors to stand by Tiger Woods these days. The athletic footwear and apparel giant is simply not earning as much as it was a year ago. Recessions have a way of eating into swoosh-craving shoppers' disposable income.

Cintas is probably the biggest surprise here. The company rents out corporate uniforms and provides other office essentials such as cleaning supplies. By most accounts, the economy is faring better now than it was a year ago. However, Cintas is still targeted to post a substantially smaller profit this time around.

Finally we have GameStop. Selling video games isn't easy these days. Digital delivery is a real threat to the storefront model, and console discounts over the past year haven't triggered the desired surge in software demand. It also doesn't help that the music games that sold so briskly in 2008 -- requiring hefty investments in guitar, drum, and microphone controllers -- hit the wall last year.

Why the long face, short seller?
The outlook is grim. The market has rewarded many of these stocks with healthy gains over the past years, but they still haven't earned those upticks.

The good news here is that Wall Street already expects these companies to deliver shrinking bottom lines. In other words, the bad news is already baked into the shares.

The more I think about it, the less worried I become.