3 Predictions for This Week

I went out on a limb last week and came out with mixed results.

  • I predicted that shares of Barnes & Noble (NYSE: BKS  ) would miss Wall Street's earnings estimates. Analysts typically are conservative in their targets, so this may seem like a gutsy call on the surface. However, the pros have been consistently coming up short on the bookseller for the past year. Backing out one-time hits, Barnes & Noble earned $0.99 a share, ahead of the $0.92 a share that the market was expecting. I was wrong.
  • I predicted that the tech-heavy NASDAQ (INEX: ^IXIC) would outperform the Dow Jones Industrial Average. It's been a strong year so far for tech stocks relative to the more diversified blue chips that make up the 30 Dow components. NASDAQ clocked in with a 0.4% gain, just besting the Dow's 0.26% uptick. I was right.
  • My final call was for Dollar Tree (Nasdaq: DLTR  ) to land ahead of the pros on the bottom line. Well, the dollar-store giant came through. Dollar Tree's quarterly net income of $1.60 a share was just enough to beat out the pros parked at $1.59 a share. I was right.

Two for three? I know that 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 shares will rise on Wednesday
SodaStream (Nasdaq: SODA  ) reports its quarterly results on Wednesday morning.

The Israeli company behind the popular home-based soda maker has been inching higher lately. The stock surged nearly 11% higher last week, but a move like that isn't always as encouraging as it sounds. Investors are piling in ahead of the report, discounting a lot of the potential good news.

Still, SodaStream still has room to run if it was as big a hit during the holidays as bulls believe.

2. The NASDAQ Composite will once again beat the Dow this week 
I'm not superstitious, but there's little reason to veer from this pick that has panned out successfully for me every single week so far through 2012. Yes, NASDAQ has beaten the Dow 30 every single week this young year.

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. AutoZone will beat Wall Street's earnings estimates
It pays to keep your car in shape. AutoZone (NYSE: AZO  ) has been an all-weather winner in recent years. Car owners may not feel comfortable enough to splurge on new vehicles, so they're making sure they invest in keeping their aging vehicles running. As long as folks need to drive, AutoZone is going to be doing fairly well.

If analysts say the company earned $4.04 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.

Quarter EPS Estimate EPS Surprise
Q2 2011 $3.06 $3.34 9%
Q3 2011 $4.98 $5.29 6%
Q4 2011 $6.97 $7.18 3%
Q1 2012 $4.44 $4.68 5%

Source: Thomson Reuters.

Things can change, of course. Automakers are showing signs of life, and industry analysts see a strong year for new-car sales. However, AutoZone held up nicely even during the "Cash for Clunkers" rebates that encouraged drivers to turn in their old gas guzzlers for more fuel-efficient rides.

Everything seems to be falling in place for another strong quarter on the bottom line.

Three for the road
Well, there are three predictions right there. Let's see how I fare this week.

If you like to stay on top of what happens next -- and I'm guessing you do, because you're reading this article -- how about checking out The Motley Fool's top stock for 2012? It's a free report, but only for a limited time, so check it out now.

Motley Fool newsletter services have recommended buying shares of SodaStream International. 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.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.


Read/Post Comments (1) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2012, at 3:32 PM, neocad wrote:

    Nasdaq is always going to outperform Dow as long as APPL is ramping up ... because of APPL's weight in Nasdaq

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1792651, ~/Articles/ArticleHandler.aspx, 8/20/2014 11:32:42 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement