3 Predictions for This Week

I went out on a limb last week, and now it's time to see how that played out.

  • I predicted that The Fresh Market (Nasdaq: TFM  ) would close higher on Wednesday. The upscale grocer came through with a blowout quarterly report that morning. Revenue and net income blew past what the pros were expecting, and The Fresh Market provided encouraging guidance for the entire fiscal year. The stock soared 15% higher on the day. I was right.
  • I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI  ) . This was a consistent winning call during the first quarter, but the Dow 30 has won most of the early rounds this quarter. Well, it was a brutal market all around. Friday's downturn left a bigger dent on Nasdaq-listed companies -- off 3.2% on the week -- while the Dow shed 2.7% of its value. I was wrong.
  • My final call was for TiVo (Nasdaq: TIVO  ) to beat what Wall Street analysts were forecasting on the bottom line in its latest quarter. The DVR pioneerposted strong subscriber growth during the period, but its loss of $0.17 a share was more than the $0.15 deficit Wall Street was forecasting. 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. United Natural Foods will close higher on Tuesday
United Natural Foods (Nasdaq: UNFI  ) is a distributor of natural, organic, and specialty foods.

The company will report its latest quarterly results on Tuesday morning. Other organic and "better for you" distributors and supermarket chains have posted better-than-expected results, and that's a trend that bodes well as United Natural Foods steps up.

I see a day of gains after what should be a well-received and upbeat report.

2.The Nasdaq Composite will beat the Dow this week 
Betting on tech over stodgy blue chips was a steady winning bet for me earlier this year. Investors have been nervously rotating out of the tech bellwethers in recent weeks, and that's been making this call a bad bet lately. It seemed so easy when the market was pulling off back-to-back quarters of double-digit percentage gains, but I'm going to stick with this one. Most of the names in the composite are just too cheap at this point.

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. Men's Wearhouse will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

Men's Wearhouse (NYSE: MW  ) is the leading retailer of men's suits. It also has a booming business renting tuxedos. This may not seem like a great time to be selling designer suits, even at discount prices, but there's a strong bullish argument to be made here. Folks need new suits for job interviews. Right? There's also pent-up demand for new threads after holding on to the same suits during the global recession.

If analysts say that the company earned $0.55 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
Q1 2011 $0.49 $0.53 8%
Q2 2011 $1.04 $1.11 7%
Q3 2011 $0.65 $0.79 22%
Q4 2011 ($0.13) ($0.05) 62%

Source: Thomson Reuters.

Things can change, of course. Demand for fashionable suits may hit a wall. Casual Fridays may lead to casual dress earlier in the week. A leading discount department store can beef up its three-piece suits.

However, there are no signs that Men's Wearhouse will fumble this quarter to the point of failing to live up to Wall Street estimates. Everything still seems to be falling into 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 The Fresh Market. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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.


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