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 JA Solar (NASDAQ: JASO  ) would post a larger loss than the $1.53 a share that Wall Street was expecting. The maker of solar cells has been consistently surprising analysts with larger deficits, and there was no reason to expect that situation to change. That's pretty much how things played out. Shares of JA Solar plunged 11% on Monday after checking in with a massive loss of $2.56 a share. 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? Despite volatility overseas, the stateside markets held up reasonably well. The tech-heavy Nasdaq inched 0.7% lower on the week, while the Dow managed to close just 0.5% higher. I was right.
  • My final call was for Mattress Firm (NASDAQ: MFRM  ) to beat Wall Street's quarterly profit target. The fast-growing retailer of mattresses and bedding accessories has fallen out of favor with investors lately, but the one thing it has done right in its brief tenure as a public company is to surpass what the pros are forecasting on the bottom line. Analysts were looking for a profit of $0.32 a share during the quarter, and it came through with net income of $0.30. I was wrong.

Two out of 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. BlackBerry will close lower on the week
Shares of the smartphone pioneer moved lower last week after reports of soft demand for the new Z10 in its stateside debut, but the market was encouraged by a surprising quarterly profit on Thursday. Hope springs eternal that things will work out better now with the Z10 through Verizon Wireless.

Don't bet on it, though. BlackBerry's (NASDAQ: BBRY  ) report wasn't all that encouraging, with the company losing 3 million more subscribers than it had three months earlier, and there's nothing pretty about a 36% drop in revenue.

The stock ran up too high for a mobile operating system upgrade that was evolutionary, but certainly not revolutionary, in an industry that's perfectly fine on Android and iOS.

BlackBerry isn't going away. There's a clean balance sheet here, and BlackBerry has a healthy network business. However, the same speculators who bid up the shares in recent months will need a new thesis to stop them from selling. I don't see any signs for optimism.

2.The Nasdaq Composite will beat the Dow this week
Tech has been a big winner in recent years, so betting on tech over stodgy blue chips has been a good bet for me more often than not. 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 megacaps that make up the Dow Jones Industrial Average.

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

When it comes to consumer electronics, Conn's (NASDAQ: CONN  ) is a small player making waves. The company has survived the digital media migration, largely because it's not the physical media-intensive retailer that its larger rivals are. Conn's specializes in big-ticket items that are easier to purchase in person without running up hefty fulfillment costs online.

Another thing it does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $0.56 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

$0.29

$0.34

17%

Q1 2012

$0.33

$0.35

6%

Q2 2012

$0.35

$0.36

3%

Q3 2012

$0.28

$0.38

36%

Source: Thomson Reuters.

Things can change, of course. Consumers can stop buying refrigerators, mattresses, and riding mowers. Yes, Conn's stocks furniture, bedding, and lawn-care equipment, and online retailers can do a better job of selling big-ticket items. However, it was generally a strong holiday quarter for consumer electronics. It's hard to argue against the company until this trend reverses. 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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Read/Post Comments (8) | Recommend This Article (4)

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 March 31, 2013, at 4:09 PM, TimKnows wrote:

    And no one cares ..................

  • Report this Comment On March 31, 2013, at 4:10 PM, ecaffeine wrote:

    Bbry - the run up has less to do with speculation and more to do with the obscene overselling of the stock. The > 100% earnings beat shows that most of the analysts don't understand the stock and if they still don't upgrade the stock retrospectively (here is a catalyst for you) at least they are clearly not doing their jobs and have no excuse. People are still missing the value of their BES10 service revenue and I recommend reading the reports from Jeffries and MS. That being said... BB10 still has a chance catch on since it has the best email/calendar/messaging/browser/security which is what you use you really phone for... If you want to just consume entertainment content a tablet is what you are looking for anyways...

  • Report this Comment On March 31, 2013, at 4:21 PM, midnightmoney wrote:

    I like the repeat call this week on mattress firm:)

  • Report this Comment On March 31, 2013, at 4:48 PM, criticalfool wrote:

    Rick, seriously man, find something else to do. You waste other people's time and thats not good. Dont you see your life is so pointless, empty and inconsequential.. in fact you are a liability to the society.

  • Report this Comment On March 31, 2013, at 5:07 PM, Oril wrote:

    Wow five articles out today on Easter Sunday by this idiot Munarriz. What's the matter Rick, having trouble paying the bills lately with all your BS predictions?

    I guess the royalties aren't rolling in from your lame attempt to become a best selling author when you published 'Why Kindle Will Fail' back in 2007. What's really hilarious is the 'book' is now seven years later only available on Kindle.

    Hey do you think you could do another attempt and call it Why Blackberry Will Fail? It will make hilarious reading one day when blackberry takes over top spot while apple gets sold off.

  • Report this Comment On March 31, 2013, at 5:40 PM, Oril wrote:

    Ecaffeine- Yes, and it looks like blackberry may well be back on top with tablets as well. After the successful and profitable introduction of the Z10 and Q10 smartphones the upcoming release of the revolutionary new U10 tablet in the third or fourth quarter is being leaked this weekend which may well relegate the clunky iPad to the dustbin of history.

    It may well feature prominately in the future epic film called the 'Rise and Fall Of The Apple Empire'.

    Available one day on Blackberry World.

  • Report this Comment On March 31, 2013, at 6:49 PM, tgzo123 wrote:

    Are you really that desperate for article hits? Your predictions are as mature as those published by grade school kids.

    Why do you waste your life away like this?

  • Report this Comment On March 31, 2013, at 8:57 PM, lakers44 wrote:

    Your judging Blackberry on there new phone that hasnt even come out yet .Im talking the B10 with the keyboard doesnt arrive till April overseas and May in the U.S. Thats the Blackberry people are waiting to buy!

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