Why settle for ordinary quarterly reports?
I believe that trumping the analysts is the biggest contributor to a stock's outperformance. Leaving Wall Street's pros with quizzical looks usually means that the companies they lowballed have something left in the tank, and capital appreciation often follows. That's why I look every week at a few companies that recently beat market expectations. Let's examine three of them.
We can start with Black & Decker (NYSE: BDK ) . The workbench master posted a third-quarter profit of $1.42 a share. That's less than the $1.59 the company earned a year ago, but the more recent figure includes a $0.21-per-share restructuring charge. Either way, Mr. Market was looking for net income of only $1.29 a share.
Baidu.com (Nasdaq: BIDU ) was another topper. China's leading search engine followed the analyst-thumping example that global leader Google (Nasdaq: GOOG ) set a week earlier. Baidu saw its quarterly net income soar 91% to $1.47 a share, well ahead of the $1.28 that Wall Street was targeting.
This news naturally bodes well for other Chinese Internet stocks such as Sohu.com (Nasdaq: SOHU ) and SINA (Nasdaq: SINA ) . Growth-stock investors who've been burned by stateside companies' bleak holiday guidance can take heart. There are plenty of opportunities in China, where the economy --- for now -- is holding up relatively better.
Finally, biotech giant Amgen (Nasdaq: AMGN ) is breaking through. Wall Street expected the company to earn $1.08 a share, flat with last year's showing. Instead, the drug maker delivered a profit of $1.23 a share.
The market is warming up to Amgen again. Despite Wall Street's general malaise, shares of Amgen have risen by 46% since bottoming out back in March.
Keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors, as the market rewards the overachievers. That's the kind of surprise we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.
Either way, come back next Monday to learn about more stocks that blew the market away.