3 Predictions for the New Week

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

  • I predicted that 3D Systems  (NYSE: DDD  )  would move higher on the week. The maker of 3-D printers had shed nearly half of its value in 2014 after a huge rally a year earlier. 3D Systems was reporting earnings on Tuesday, and that seemed like a great time to get its story out. It didn't pan out that way. 3D Systems took a hit on Tuesday. The shares started to bounce back after that, but it wasn't enough. The stock slipped 2% on the week. I was wrong.
  • The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has been clobbering the Nasdaq Composite lately, but I still think the tech-centric Nasdaq is the place to be. My second prediction was for the Nasdaq to beat the Dow on the week. It had been a bad bet in recent weeks, but it panned out this time. The Nasdaq Composite increased 1.2% on the week. The Dow moved 0.9% higher. I was right.
  • My final call was for LifeLock  (NYSE: LOCK  )  to beat Wall Street's income estimates in its latest quarter. The leading provider of ID theft monitoring services had beaten analyst targets consistently over the past four quarters, and I was banking on a repeat performance. We saw it close out the quarter with a deficit of $0.01 a share. Analysts had been projecting a loss of $0.02 a share. The stock took a hit on unflattering guidance, but it was a beat on the bottom line. 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. Monster Beverag will miss Wall Street's profit estimate
Monster Beverage  (NASDAQ: MNST  )  has proven that you can beat the cola giants in the beverage market. Monster and rival Red Bull dominate the energy drink category, much to the lament of the soda giants that have tried to gain a foothold in the market.

Things haven't been exactly smooth for Monster, especially when it comes to the battle on how its products should be labeled. There's also the growing fear of the health ramifications of consuming too many energy drinks, particularly by younger Monster fans. There's also Monster's fight against analysts. Monster has come up short against Wall Street expectations in each of its past four quarters. The pros are projecting a profit of $0.49 a share, but the trend suggests it won't make the cut.

My first call is for Monster Beverage to clock in below Wall Street's net income expectations. 

2. Nasdaq will beat the Dow this week
I've routinely picked the tech-heavy Nasdaq Composite to beat the Dow Jones Industrial Average, and it's been a bad bet in recent weeks. It finally paid off last week, and I'm going to stick with it again for a repeat performance. My second call is for the Nasdaq Composite to beat the Dow Jones Industrial Average for the week.

3. Tesla Motors will beat Wall Street's earnings estimates
Some stocks are just flat out better than others.

Tesla Motors  (NASDAQ: TSLA  ) is undeniably the coolest maker of electric cars. Its Model S sedan continues to gain momentum with every passing quarter, and the push overseas is generating global demand for Tesla's costly yet desirable vehicles.

Another thing it does is make analysts look like perpetual underachievers. If analysts say that the company rang up a profit of $0.10 a share in its latest quarter, I'll argue that it held up better than that. 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 2013

$0.04

$0.12

200%

Q2 2013

($0.17)

$0.20

218%

Q3 2013

$0.11

$0.12

9%

Q4 2013

$0.21

$0.33

57%

Source: Thomson Reuters.

Things can change, of course. Subsidies for electric vehicle ownership could dry up. The Model X crossover vehicle could get delayed. Cheaper plug-in cars could grow more appealing as value propositions. That's all stuff to keep in mind down the road, but not now. Everything seems to be falling into place for another market-thumping quarter on the bottom line.

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  • Report this Comment On May 08, 2014, at 5:23 PM, jodinajoseph wrote:

    Tesla says it’s going ahead with plans for its huge battery factory. From the shareholder letter: The Gigafactory project is on course to begin battery cell and pack production in 2017. We have not yet finalized the ultimate location for the Gigafactory and we are going to start work on at least two locations in parallel in order to minimize risk of delays arising after groundbreaking http://bit.ly/1kSUgzk

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