3 Predictions for the New Week

This Fool sees a limb to go out on. And another. And another.

May 11, 2014 at 3:00PM

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

  • I predicted that Monster Beverage (NASDAQ:MNST) would miss analyst profit forecasts. I'm a fan of the energy drink maker's product. It joins Red Bull as the two category killers in the juicy niche of carbonated energy beverages. However, I couldn't ignore Monster's knack for coming up short on the bottom line over the past year. I figured Monster would do the same this time around. The pros were holding out for $0.49 in net income per share for the period, and on Thursday we saw Monster come through with earnings of $0.55. 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 didn't work out this time. The Nasdaq Composite slipped 1.3% on the week. The Dow moved 0.4% higher. I was wrong.
  • My final call was for Tesla Motors (NASDAQ:TSLA) to beat Wall Street's income estimates in its latest quarter. The coolest player by far in the realm of electric sedans 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 an adjusted profit of $0.12 a share. Analysts had been projecting net income of $0.10 a share. The stock may have taken a hit on the report as a whole, but it was a beat on the bottom line. I was right.

One 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. SodaStream shares will move higher on the week
SodaStream (NASDAQ:SODA) has been making headlines in recent weeks as a buyout candidate, but this week it can set aside the fizz and hope that it earns its gains by not going flat. The company behind the popular home-based soda maker reports on Wednesday, giving it a chance to show investors that the recent correction before the acquisition chatter-fueled rally was a mistake.

It's easy to bet on SodaStream here. It has continued to post healthy sales growth across all three of its product categories, and it has beaten profit targets consistently over the past year. 

My first call is for SodaStream to move higher for the week. 

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 didn't pay off this past week, but 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. magicJack VocalTec will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

magicJack VocalTec (NASDAQ:CALL) is a growing provider of Web-based telephone service. The VOIP pioneer markets its magicJack service as a low-cost alternative to traditional landlines. It has sold more than 10 million of its namesake devices.

Another thing it does is make analysts look like perpetual underachievers. If analysts say 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

$0.51

$1.17

129%

Q2 2013

$0.32

$0.35

9%

Q3 2013

$0.42

$0.48

14%

Q4 2013

$0.41

$2.50

510%

Source: Thomson Reuters.

Things can change, of course. Consumers can continue to ditch secondary phone lines completely. Cheaper platfroms may emerge. 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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Rick Munarriz owns shares of SodaStream. The Motley Fool recommends and owns shares of Amazon.com, Monster Beverage, SodaStream, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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