3 Predictions for This Week
Sep 16th 2012 3:09PM
Updated Sep 16th 2012 3:12PM
I went out on a limb last week, and now it's time to see how that decision played out.
- I predicted that Apple (NAS: AAPL) would close out the week higher. The stock rallied on iPhone 5 buzz leading up Wednesday's big reveal, and I figured the company would be able to keep the good vibes coming. Well, Apple shares broke through all-time highs on Thursday and Friday. I was right.
- I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI) . The market was kind this week, with the tech-heavy Nasdaq climbing 1.5% higher. However, the Dow managed to climb 2.2% on the week. I was wrong.
- My final call was for Globecomm (NAS: GCOM) to beat Wall Street's profit target. The provider of satellite-based managed network solutions saw its profitability more than triple to $0.31 a share, but there was also a meaty one-time earn-out gain in the mix. Back that out, and Globecomm's net income of $0.13 a share was well short of the $0.20 a share that the pros were forecasting. I was wrong.
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. LDK Solar will lose more money than analysts are expecting
Solar's been a pretty scary place to be lately, and LDK Solar (NYS: LDK) has been one of its bigger disappointments. The stock traded in the $50s four summers ago, but it now finds itself closing in on Dollar Menu pricing.
Unfortunately for investors, LDK Solar has posted wider deficits than analysts were targeting in each of the four past quarters. With that kind of track record, the smart money has to say that LDK Solar will lose more money than the $1.43 a share Wall Street expects when the company reports on Monday.
2.The Nasdaq Composite will beat the Dow this week
Betting on tech over stodgy blue chips was a steady winning bet for me earlier this year. This has been a losing bet lately, but I still think technology is the best sector to be invested in these days.
I'm going to stick with this pick. Most of the names in the composite are just too cheap at this point.
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.Globecomm will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.
TIBCO Software (NAS: TIBX) is a provider of enterprise software, offering more than 4,000 customers its infrastructure software to manage information, decisions, processes, people, and data in real time.
Another thing it does is make analysts look like perpetual underachievers. If analysts say the company earned $0.27 a share in its latest quarter, I'll whip out a "greater than" sign. 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.
Source: Thomson Reuters.
Things can change, of course. Companies can scale back their IT expenditures, shift to different infrastructure software providers, or just go out of business and not need TIBCO at all. However, there are no signs that the company will fumble this quarter to the point of failing to live up to Wall Street estimates. Everything still seems to be falling into place for another strong quarter on the bottom line.
Three for the road
Well, there are three predictions right there. Let's see how I fare this week.
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The article 3 Predictions for This Week originally appeared on Fool.com.The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and TIBCO Software and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.
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