I went out on a limb last week, and now it's time to see how that decision played out.
- I predicted that SodaStream (SODA +0.00%) would close higher on the week. I figured the company behind the namesake beverage maker would post strong quarterly results, igniting new interest in the shares. Well, the report was good, but not great. Earnings guidance came in weak, and it was surprising to see Western Europe growing faster than the Americas. The stock closed out the week lower. I was wrong.
- I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (^DJI 1.01%). This has been a tricky call lately, so how did it play out this time? Well, this was a mixed week for stocks. The Nasdaq moved 0.5% lower, losing out to the Dow and its 0.3% gain. I was wrong.
- My final call was for SunPower (SPWR +0.00%) to beat Wall Street's income estimates in its latest quarter. The provider of solar-energy equipment had consistently beaten bottom-line expectations over the past year, and I was banking on a repeat performance. It posted net income of $0.44 a share, blowing past the $0.25 the pros were forecasting. The stock rallied sharply on the news. 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. Rockwell Medical will lose more money than Wall Street is forecasting
Rockwell Medical (RMTI 9.41%) reports on Tuesday, and analysts see another quarterly loss. This comes with the territory of young biotechs as they struggle to get their potential treatments to market.
This could be a good week for Rockwell. It will be presenting at the ASN Kidney Week 2013 conference later in the week, offering up new data on Triferic, a treatment that tackles anemia in kidney disease. It is administered with every dialysis session to maintain iron levels. However, this isn't a call about seeing Rockwell go up or down. We're looking only at Tuesday's quarterly results. Rockwell has actually posted larger deficits than Wall Street was targeting in three of the past four quarters. I like my odds to see it happening again.
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, even if it's been a bad bet a few times lately. This is the time for the Nasdaq's growth stocks to shine. 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. OpenTable will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
OpenTable (OPEN +0.00%) is the top dog in Web-based dining reservations. It also provides participating restaurants with a leading-edge electronic reservations book platform to manage their traffic.
OpenTable has no shortage of naysayers, arguing that cheaper solutions are available and that's it's just a matter of time before tech giants move into this field. Well, OpenTable is still a popular option for reservations-based eateries, and average seatings per establishment continue to go up.
Another thing it does is make analysts look like perpetual underachievers. If analysts say the company posted a profit of $0.42 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 |
|---|---|---|---|
|
Q3 2012 |
$0.36 |
$0.42 |
17% |
|
Q4 2012 |
$0.43 |
$0.46 |
7% |
|
Q1 2013 |
$0.43 |
$0.45 |
5% |
|
Q2 2013 |
$0.47 |
$0.50 |
6% |
Source: Thomson Reuters.
Things can change, of course. We've been seeing uninspiring quarterly reports out of casual-dining eateries this season, and if the same trend holds up for higher-end foodie haunts, it could deal a blow to OpenTable's business. If folks don't want to eat out, it doesn't matter that OpenTable's platform is in the industry standard.
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.
