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 by 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 will be forecast to lose money, but they'll upend the analysts' apple cart by recording profits. You sometimes can't actually calculate by how much they beat the estimates (seventh-grade math tells us we can't divide by zero or less and get a meaningful result!), but it's still useful to understand why they were able to exceed expectations.

Company

CAPS Rating (out of 5)

Last Quarter EPS Estimate

Last Quarter EPS Actual

Est. LT Growth

Las Vegas Sands (NYSE: LVS  )

**

$0.09

$0.17

124%

Manitowoc (NYSE: MTW  )

*****

$0.06

$0.12

11%

RINO International (Nasdaq: RINO  )

***

$0.44

$0.65

NA

Source: Yahoo! Finance.

The above three companies beat estimates recently, but that isn't necessarily enough to make the stock a winner. 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 companies listed above will have the last laugh.

Laugh, clown, laugh!
Gambling is back, baby! Well, in Macau anyway, not in Las Vegas. Gross revenues in the Chinese casino oasis soared 70% as the depressing effects of World Cup soccer disappeared and business steered clear of the Nevada resort. It can't be all that surprising, though, considering MGM Resorts (NYSE: MGM  ) dumped thousands more rooms onto a market already staggering from an abundance of vacancies after it opened its massive CityCenter project.

Wynn Resorts' (Nasdaq: WYNN  ) earnings report underscores the lucky streak hit by Macau: Profits doubled on the strength of operations there. Similarly, Las Vegas Sands hit the jackpot there, with revenues jumping 40% even as its domestic business fell.

CAPS member gimponthego says as good as business is in Macau, when gamblers can actually drive there, look for Lady Luck to smile broadly on Las Vegas Sands.

Money is generated in Macao. When Tunnel to main land China is completed, LVS will be a $75 stock.

Light at the end of the tunnel
The signs keep mounting that the economic recovery we witnessed, anemic as it was, peaked back in the fourth quarter of 2009, and like a form of slow torture, we're having bad news drip, drip, dripped on us about where we're headed now.

Real gross domestic product growth fell further than anticipated, coming in at just 2.4% growth, suggesting President Barack Obama's "recovery summer" is simply a mirage. Today's report that factory orders were off 1.2% in June, more than double the 0.5% decline economists predicted, is yet another indicator we're heading for a double-dip recession. So when Manitowoc reports that its crane business dropped 12%, we understand the slowing demand it's suffering from.

Yet Caterpillar (NYSE: CAT  ) didn't see the same result because of its exposure to Latin America, where revenues jumped 83%, and equally important, machine sales were up 116%. Manitowoc generates less than 5% of its sales from Central and South America while Bucyrus International (Nasdaq: BUCY  ) derives almost 12% from Chile alone, but also has additional sales offices in Brazil and Mexico.

Still CAPS member steelheart100 isn't about to give up on the crane maker, saying its food service business will continue putting food on the table.

Well run company with crane and commercial kitchen outfitting business. Steadily paying back debt used for recent acquisitions If you drive by a crane for road construction it was probably made by this company. The business does well on replacement parts for the cranes and will have a big lift when things pick [up] commercially again. Until then road construction never ends and we'll always eat and need something (most likely someone else cooking) to eat.

Dim the lights
Chinese wastewater treatment specialist RINO International has been flying under the radar of much of Wall Street so that despite rising revenues and profits its stock is down 50% year to date. That obviously smells like opportunity to CAPS members who look at China's economic growth and understand the need for improving the country's sanitary conditions. More than 92% of those rating RINO mark it to outperform the indexes.

Head over to the RINO International CAPS page and clean up with your view on its future.

Yuk it up
The market's rally has changed from being mostly fueled by low-quality stocks to dragging most others along based on lower 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.

Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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