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 Titan Machinery (NASDAQ: TITN  ) would close lower on the week. The specialty retailer of agricultural and construction equipment has been disappointing on the bottom line in recent quarters, and analysts were expecting Titan to post its first quarterly deficit since going public six years ago come Thursday. It did. The stock declined 0.5% 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? Well, the market saved itself by rallying on Friday. The Nasdaq moved 0.4% higher on the week. The Dow managed to close 0.9% lower. I was wrong.
  • My final call was for Francesca's Holdings (NASDAQ: FRAN  ) to beat Wall Street's income estimates in its latest quarter. The rapidly expanding boutique operator has been posting blowout quarterly results over the past year, and I was banking on seeing the trend continue. Analysts were looking for a profit of $0.26 a share during the quarter, and it merely matched that target. That was close, but not what I had predicted. I was wrong.

One out of three? Bummer! I was an impressive 16 out of 18 over the six previous weeks.

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. Apple will close higher on the week
Apple (NASDAQ: AAPL  ) has shed more than 37% of its value since peaking the day the iPhone 5 hit the market late last year. Patient investors are holding out for catalysts at a time when earnings are falling, margins are contracting, and revenue growth has slowed to a crawl.

Things could change this week. Apple kicks off its annual conference for developers on Monday, and the weeklong WWDC 2013 event should also give investors reasons to get excited about the consumer tech giant's near-term future. Between operating system updates and the potential for new product and product-category announcements, this new week is a good a time for a long overdue rally.

My first call is for Apple shares to move higher for the week.

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, and tech should be what carries us through the economic recovery. 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.Ulta Beauty will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

Ulta Beauty (NASDAQ: ULTA  ) is a fast-growing chain of 550 stores that sell beauty products and offer salon services. Net sales soared 25% last year, fueled by a healthy expansion activity and an 8.8% spike in comps.

Another thing it does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $0.62 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 2012

$0.53

$0.54

2%

Q2 2012

$0.51

$0.54

6%

Q3 2012

$0.56

$0.59

5%

Q4 2012

$0.98

$1.00

2%

Source: Thomson Reuters.

Things can change, of course. Vanity can fade. Customers can get by on fewer beauty products and turn to cheaper outlets for salon services.

However, it's hard to argue against the trend. 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.

With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!


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  • Report this Comment On June 09, 2013, at 4:03 PM, kfchild41 wrote:

    Where do you start with the price of a stock. I think you barely broke even with titn. Also who cares if the Nasdaq closes higher or lower every week than the Dow. Such a lame pick every week!!!!

  • Report this Comment On June 09, 2013, at 4:34 PM, kthor wrote:

    in Apple it's like up next week, down the other week ...it's a heaven for weeklies

  • Report this Comment On June 09, 2013, at 10:42 PM, TMFBreakerRick wrote:

    kfchild, I go for the entire week on the weekly picks. It's from Friday's close the week before to Friday's close a week later.

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Related Tickers

12/19/2014 4:39 PM
^DJI $17804.80 Up +26.65 +0.15%
DOW JONES INDUSTRI… CAPS Rating: No stars
AAPL $111.78 Down -0.87 -0.77%
Apple CAPS Rating: ****
ULTA $129.22 Down -0.48 -0.37%
Ulta Salon, Cosmet… CAPS Rating: ****
FRAN $16.44 Down -0.19 -1.14%
Francesca's Holdin… CAPS Rating: ***
TITN $13.40 Up +0.05 +0.37%
Titan Machinery CAPS Rating: ****

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