3 Predictions for the New Week

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

Jul 27, 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 Baidu (NASDAQ:BIDU) would hit an all-time high during the week, something that it had failed to do in the prior 11 trading days after peaking earlier this month. It didn't take long for this one to happen, since an analyst upgrade on Monday made it happen and a strong quarterly report on Thursday kept it soaring to new heights. In fact, Baidu hit new highs in each and every single trading day last week. I was right.
  • The Dow Jones Industrial Average (DJINDICES:^DJI) seemed to be Teflon-coated, rising a week earlier despite mounting geopolitical pressures. I figured the index of blue-chip stocks was due for a breather, calling for it to decline on the week. It did. The Dow slipped 0.8% for the week. I was right.
  • My final call was for Facebook (NASDAQ:FB) to beat Wall Street's income estimates in its latest quarter. The leading social-networking website operator had beaten analyst targets consistently over the past few quarters, and I was banking on a repeat performance. We saw it close out the quarter with a profit of $0.42 a share. Analysts had been projecting net income of $0.32 a share. I was right.

Three out of three? Nice. It's good to bounce back after three bad weeks of prognostications. 

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. Whole Foods Market will move lower
Whole Foods Market (NASDAQ:WFM) has been a market darling for years, but it's been stumbling lately. After years of consistently beating Wall Street forecasts, the organic grocer has come up short in back-to-back quarters. The competitive nature for organics finds more traditional outlets stocking all-natural items at competitive pricing. The last thing Whole Foods Market wants is a price war. It reports on Wednesday, and until it can get back to landing ahead of analysts again, taking a cautious stance makes sense. 

My first call is for Whole Foods Market to close lower for the week.

2. The Dow will close lower this week
Calling for the Dow to slide last week was the right call, and given the ho-hum earnings season we've been having, coupled with global uneasiness, I'm going to stick with this call for at least another week. My second call is for the Dow to close lower for the week.

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

CommVault Systems (NASDAQ:CVLT) is a fast-growing provider of enterprise software. CommVault's platform gives companies greater control in analyzing data growth, costs, and risk. Another thing it does is make analysts look like perpetual underachievers. If analysts say the company rang up a profit of $0.41 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 2014




Q2 2014




Q3 2014




Q4 2014




Source: Thomson Reuters.

Things can change, of course. CommVault needs a buoyant corporate economy to keep signing up new customers, and that's not a sure bet these days.

It's also worth pointing out that the gap narrowed in the previous quarter between CommVault's profit and what analysts were projecting, after several periods in which the gap had progressively widened. 

That's all stuff to keep in mind down the road. For now, everything seems to be falling into place for another market-thumping quarter on the bottom line.

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John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Baidu, Facebook, and Whole Foods Market. 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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