These Stocks Laugh at Wall Street

In these heady economic times, Mr. Market seems to enjoy dogpiling on any stock that dares to fall short of analysts' estimates. To defy that trend, we're here to celebrate stocks that didn't merely meet Wall Street's predictions, but laughed in analysts' faces, leaving their miserly forecasts in the dust. The companies below have all soundly trounced earnings estimates by 20% or more in the last quarter.

Sometimes a company forecast to lose money will upend the analysts' apple cart by recording profits. You can't actually calculate the degree to which they beat the estimates (seventh-grade math tells us we can't divide by zero or less), but it's still useful to understand why they were able to exceed expectations:

Source: Yahoo! Finance and CAPS.

Though the three companies above beat estimates recently, that alone isn't necessarily enough to make any of them winners. Analysts are notoriously lousy at forecasting results, and one-time items can sometimes push earnings over the top. Wall Street professionals typically don't include such extraordinary events in their forecasts.

Rather than focusing only on the past, we'll check whether analysts have a bead on future performance. With help from Motley Fool CAPS, we'll see which of the top companies listed above will have the last laugh.

Laugh, clown, laugh!
Weight-loss product maker Medifast keeps defying the critics who have alleged that its operations are little more than a pyramid scheme. While those charges cut the stock in half earlier this year, it has since regained all that ground. Its sales grew 75% in the quarter, generating earnings that almost doubled from the year-ago period.

One of the biggest complaints against Medifast is that it resembles a multilevel marketing scheme, though Tupperware (NYSE: TUP) seems to have done well for itself with that business model. When the issue rose anew in Janaury, I suggested that Medifast needed only to do well to silence its critics. The company's strong performance seems to have done the trick.

At the time, CAPS member pagefm83 correctly called for the stock's return to its previous level:

nothing will come of these allegations and the stock will climb back to where it left off, and then continue to grow like it always has...no evidence in sight that this will not be the case, great earnings and profit, lots of cash

Lights out
While Medifast has to overcome critics, ReneSola seems to be working doubly hard to oppose views that solar won't succeed without subsidies. With Europe facing an expensive tab to solve growing financial worries, feed-in tariffs are on the chopping block, and the euro is crumbling.

An analyst noted that with revenue reported in euros, but expenses in dollars or renminbi, the devaluation under way abroad will pummel solar companies like ReneSola, Trina Solar (NYSE: TSL), and JA Solar (Nasdaq: JASO).

Despite headwinds from a stronger dollar, ReneSola almost doubled revenue to $207 million, on the strength of record product shipments. But it's possible that customers were trying to get orders in ahead of the tariff cuts, and to top it all off, now even oil prices are falling. Solar looks a lot more attractive when oil's approaching $100 a barrel; with crude dipping to $70 again, next quarter might not be so bright.

CAPS member Kemya still likes ReneSola's impressive recent performance, not to mention the technical indicators that suggest it's set for further gains:

Higher demand, 2nd quarter positive revenue, lowest [relative] performance (among peers), and trading above 50 day moving average.

A real shoot-'em-up
At least Western Refining would benefit from lower oil prices. It's had to contend with a recession that simultaneously dissipates demand and swells inventories. Western recorded a narrower-than-expected loss, even as revenue soared 40% this quarter to $1.9 billion.

A major turnaround project at the company's El Paso refinery reduced throughput there by 17%. The same thing happened at Valero (NYSE: VLO) last quarter, and my Foolish colleague Mike Pienciak sees things looking up for that refiner. Western Refining investors seem to have similar expectations.

As with most hopes for recovery, CAPS member jfielhauer thinks it China will ultimately get the company moving again:

High oil prices will return, but it will be the Chinese that provide the demand. This stock has been particularly hard hit, so I'm very bullish.

Yukking it up
The market's rally, once mostly fueled by low-quality stocks, now drags most others along, thanks to easier year-over-year comparables. If you think there's some funny business afoot, let us know -- head over to Motley Fool CAPS and sound off.