I went out on a limb last week, and now it’s time to see how that decision played out.
- I predicted that LeapFrog Enterprises, Inc. (NYSE:LF) would close out the week higher. After dominating the lists of the hottest-selling toys during the holidays, it was easy to expect big things out of the maker of electronic education toys. LeapFrog did come through with a better-than-expected report. Net sales rose 16% and margins widened as operating income climbed 28%. However, the market wasn’t wowed by the performance. Shares of LeapFrog inched 3% lower on the week. I was wrong.
- I predicted that the tech-heavy NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) would outperform the Dow Jones Industrial Average. . This has been a tricky call lately, so how did it play out this time? The Nasdaq closed 0.5% higher, pushed higher by a strong Friday for tech stocks. The Dow, on the other hand, clocked in with a decline of 0.1% on the week. I was right.
- My final call was for OpenTable Inc (NASDAQ:OPEN) to beat Wall Street’s quarterly profit target. Despite a perpetually healthy flow of skepticism, the leading online dining reservations specialist continues to tack on new restaurants to its platform. OpenTable has also been consistently beating the prognosticators, and there’s little reason to bet against OpenTable until that trend reverses itself. Analysts were looking for a profit of $0.43 a share. OpenTable came through with net income of $0.46. I was right.
Two 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. Apple Inc. will close out the week higher
Shares of Apple Inc. (NASDAQ:AAPL) moved 5.3% higher last week as the company responded to calls for the tech giant to dig deeper into its pockets to return more of its money to stakeholders.
The rally has legs. Apple shares had gotten too cheap. Yes, Android is eating Apple’s lunch, and margins may get pressured in the future, but valuing Apple based on its existing portfolio of products ignores its ability to innovate. The 2001 iPod, 2007 iPhone, and 2009 iPad show that the company can carve out new markets that didn’t exist until Apple appeared.
Apple isn’t likely to make any major announcements in the coming days, but investors were too hard on Apple in seeing the stock plummet more than 30% off last year’s all-time highs. Apple isn’t perfect, but it’s a better value than cynics believe. My first call is for Apple to close the week higher.