3 Predictions for Next Week

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

  • I predicted that BlackBerry (NASDAQ: BBRY  ) would close out the week lower. Despite Wednesday's BlackBerry 10 event, the shares had nearly tripled heading into the event. The buzz and hype were unsustainable. I nailed it. The old "sell on the news" adage proved resilient. My suggestion a week earlier to sell as BlackBerry shares were peaking above $18 proved to be a valuable one for anyone who listened. Shares of BlackBerry plunged 26% on the week. I was right.
  • I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (DJINDICES: ^DJI  ) . This has been a tricky call lately, so how did it play out this time? It was close. Nasdaq closed 0.9% higher. The Dow, on the other hand, clocked in with a gain of 0.8% on the week. I was right.
  • My final call was for MasterCard (NYSE: MA  ) to beat Wall Street's quarterly profit target. The leading credit card marketer has been consistently charging ahead of the prognosticators, and there was little reason to bet against that trend as shoppers hit the malls during the holidays. Analysts were looking for a profit of $4.81 a share. MasterCard came through with net income of $4.86 a share. I was right.

Three out of three? Awesome!

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. LeapFrog will close out the week higher
LeapFrog Enterprises (NYSE: LF  ) reports on Wednesday. Analysts see the maker of popular electronic educational toys matching the $0.49 a share it earned during last year's holiday quarter.

That seems to be a conservative bet. LeapFrog's product line dominated the lists of hottest sellers this past holiday shopping season. Some of the traditional toy manufacturers are struggling these days as players turn to apps and other diversions, but LeapFrog is all over that revolution with its kid-friendly tablet.

LeapFrog also aims for a younger crowd, and parents enjoy buying playthings that will develop their children's abilities.

My first call is for LeapFrog to close the week higher.

2. The Nasdaq Composite will beat the Dow this week
Betting on tech over stodgy blue chips was a steady winning bet for me last year. This has been a losing bet lately, but I still think technology is the best sector to be invested in these days.

I'm going to stick with this pick. Most of the names in the composite are just too cheap at this point, and the results this earnings season aren't as bad as some worrywarts feared. 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. OpenTable will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

OpenTable (NASDAQ: OPEN  ) is the leading provider of online reservations to the fine dining establishments that take them. Yet there's no shortage of naysayers. Skeptics argue that restaurants will turn to cheaper solutions, refusing to pay for OpenTable's direct leads in exchange for a set amount based on the number of seated patrons.

However, every passing quarter finds more and more restaurants hopping on the platform -- and the average eatery filling even more of its open tables through OpenTable.

Another thing OpenTable does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $0.43 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

Q4 2011

$0.30

$0.37

23%

Q1 2012

$0.34

$0.40

18%

Q2 2012

$0.37

$0.42

14%

Q3 2012

$0.36

$0.42

17%

Source: Thomson Reuters.

Things can change, of course. Folks could start eating out less. They could trade down to cheaper chain restaurants. There's also the eventual possibility that another platform comes along that's more effective than OpenTable in helping high-end restaurants attract foodies. However, there are no signs that we consumers are turning our backs on fine dining.

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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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 03, 2013, at 3:38 PM, TimKnows wrote:

    Just for the record, can you give us a reference of someone else who predicted RIM would go up last week?

  • Report this Comment On February 03, 2013, at 4:39 PM, smartinfo wrote:

    I believe Blackberry stock can only go up from here as more positive reviews about the Z10 keep surfacing. I predict $20 to $22 share price just prior to US release. $40 to $45 share price this summer after the Q10 sales a announced. http://www.forbes.com/sites/ericsavitz/2013/02/01/blackberry...

  • Report this Comment On February 03, 2013, at 7:21 PM, myeerah wrote:

    InfoIneedhelp is the biggest hater of blackberry and searches for stories were he can bash the company.Not to be trusted.I would hate to be his ex wife.Can you say stalker! Probably has a crush on Heins!

  • Report this Comment On February 03, 2013, at 11:05 PM, TMFBreakerRick wrote:

    TimKnows, follow the link in the very first sentence of the article. It was last week's prediction. There were several reader comments saying RIM would spike this past week. Your own comments didn't go that far, but read the first few posters.

  • Report this Comment On February 04, 2013, at 1:19 PM, bunchofdonkeys wrote:

    Blackberry is up 12% today...anything else??

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