3 Stocks That Blew the Market Away

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Why settle for ordinary quarterly reports?

I believe that the biggest factor in a stock's ability to beat the market is its ability to beat the market's expectations. That's why I look every week at three companies that have humbled Wall Street's pros over the past few trading days. If a company has more in the tank than the analysts figured, capital appreciation often follows.

We can start with Casey's General Stores (Nasdaq: CASY). The market was expecting improvement out of the discount retailer. Its quarterly profit was supposed to clock in at $0.60 a share, marginally ahead of the $0.57 it rang up a year ago. Casey's hit it out of the park, earning $0.87 a share for the period.

Shuffle Master (Nasdaq: SHFL) also had a winning hand. The maker of automatic card shufflers earned $0.10 a share, enough to beat the $0.07 profit target. Servicing the casino industry has been a losing bet lately, but maybe the sector has turned the corner. Wynn Resorts (Nasdaq: WYNN) plans to raise as much as $1 billion by listing its Macau-based assets in Hong Kong. As a bonus to Shuffle Master, cash-strapped states may turn to legalized gambling to help offset their budgetary shortfalls.

Pep Boys (NYSE: PBY) is another winner. The auto-parts chain posted a profit of $0.15 a share for its latest quarter, ahead of both the $0.10 it earned a year ago and the $0.14 that Mr. Market was looking for. Rival auto-supply retailers AutoZone (NYSE: AZO) and Advance Auto Parts (NYSE: AAP) have been outsmarting analysts lately, as consumers with aging cars spend more money to maintain their vehicles.

So keep watching the companies that surpass expectations. Over time, doing so 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.