3 Predictions for This Week

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

• I predicted that Intuitive Surgical (Nasdaq: ISRG) would close out the week with a positive gain. The surgical robotics specialist managed to post the market-thumping bottom-line performance that I was expecting, but the report itself wasn't as comforting to investors. The stock took a hit, tumbling nearly 8% on the week. I was wrong.
• 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 clawed back during the second quarter. How will the third quarter play out? Well, the market somehow clawed its way higher. The Dow clocked in with a 0.4% gain on the week, but the tech-heavy Nasdaq managed to move 0.6% higher. I was right.
• My final call was for Select Comfort (Nasdaq: SCSS) to beat what Wall Street analysts were forecasting on the bottom line in its latest quarter. The company behind the Sleep Number air-chambered mattress had seen its main public rival slip a few weeks ago, but Select Comfort has been landing ahead of where Wall Street's expectations are perched over the past year. Select Comfort's profit of $0.30 a share surpassed the $0.27 a share that analysts were forecasting. 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. Netflix will close out the week higher
It's easy to be down on Netflix (Nasdaq: NFLX). The video service saw its earnings and stock price peak last summer. It's been a rough year since then, though the stock has started to bounce back since CEO Reed Hastings revealed that the company served up a record billion hours of streaming video last month.

After a few lackluster quarters on the bottom line, Netflix is turning the corner. Sure, it continues to lose money in its international business, but it's apparently now earning more than enough to make up for that closer to home.

With no challenger in sight, Netflix should be able to put out an encouraging quarterly report on Tuesday. The share price should follow the optimism higher.

My first prediction is that Netflix will close out the week with positive gains.

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. This has been a losing bet lately, but I'm going to stick with this pick. 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 mega-caps that make up the Dow Jones Industrial Average.

3. Whole Foods Market will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

Don't panic when it comes to organic growth at Whole Foods Market (Nasdaq: WFM). The leading organic grocer has been posting positive comps for several quarters in a row, and consumers continue to embrace the "better for you" category of supermarket staples that are natural. Sure, there's a premium to pay for organic foodstuffs, but consumers haven't been complaining lately.

Another thing the company does is make analysts look like perpetual underachievers.

If analysts say the company earned $0.61 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.

Source: Thomson Reuters.

Things can change, of course. The economic recovery has been iffy, and that means less money to spring for organic apples or Whole Foods Market's popular prepared foods. However, check out the final column. Do you see how the degree of the surprise has been widening over the past three quarters? That's a strong indicator that analysts are failing to grasp the true money-making potential of Whole Foods.

There are no signs that the company 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.

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