3 Predictions for the New Week

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

Jun 8, 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 Netflix (NASDAQ:NFLX) would move lower on the week. After soaring nearly 30% in May I figured that the leading premium video streaming service provider was due for a breather. Bulls thought otherwise, pushing the reborn market darling even higher on the week. The stock closed 2.9% higher. I was wrong.
  • The Dow Jones Industrial Average (DJINDICES:^DJI) had been clobbering the Nasdaq Composite through April and early May, but it's been the other way around in recent weeks. My second prediction was for the Nasdaq to beat the Dow on the week. It happened. The Nasdaq Composite climbed 1,9% on the week. The Dow moved 1.2% higher. I was right.
  • My final call was for Ambarella (NASDAQ:AMBA) to beat Wall Street's income estimates in its latest quarter. The provider of video compression chips used to power GoPro wearable cameras, Dropcam surveillance systems, and other products 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 profit of $0.25 a share. Analysts had been projecting net income of $0.21 a share. I was right.

Two out of three? I can do better than that, even though I can't complain about going eight for nine over the past three 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. RadioShack will lose more than Wall Street is expecting
It isn't easy being RadioShack (NYSE:RSHCQ) these days. The small-box consumer-electronics retailer made a bad bet on emphasizing mobile products, and these days it follows up a head-turning Super Bowl ad with news that it's closing hundreds of stores.

It's against this backdrop that RadioShack is posting quarterly results on Tuesday. Analysts see a deficit of $0.52 a share, but it's easy to bet on more red ink than even that would seem to suggest. RadioShack has missed Wall Street estimates in each of its four previous quarter.

My first call is for the stock to post a larger deficit than the pros are forecasting. 

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 was a bad bet through most of March and April, but it's been rolling in recent weeks. 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. Christopher & Banks will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others. Christopher & Banks (NYSE:CBK) is a specialty retailer of clothing for women. It operates 542 stores under the Christopher & Banks, CJ Banks, and MPW monikers.

Another thing it does is make analysts look like perpetual underachievers. If analysts say the company rang up a profit of $0.21 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.


EPS Estimate



Q1 2013




Q2 2013




Q3 2013




Q4 2013




Source: Thomson Reuters.

Things can change, of course. The apparel market can be fickle, and retailers are still trying to bounce back after the rough winter weather that stung holiday sales. Christopher & Banks also has been largely ignored by investors over the years. You have to go back more than four years to find the last time that the shares traded in the double digits . 

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.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Rick Munarriz owns shares of Ambarella and Netflix. The Motley Fool recommends and owns shares of Ambarella and Netflix. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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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