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Don't settle for ordinary quarterly reports.
Every week, I take a look at three companies that beat market expectations, since I believe that it's the biggest factor in a stock beating the market. Leaving Wall Street's pros with stunned expressions can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.
Let's take a look at a few companies that humbled the prognosticators over the past few trading days.
We can start with Mosaic (NYSE: MOS ) making fertilizer out of Wall Street's estimates. The potash specialist delivered a quarterly profit of $1.40 a share, topping the $1.28 a share the pros were targeting.
But Mosaic's strong showing wasn't enough to escape an analyst downgrade. Citi prefers the faster growth and comparable valuation of CF Industries (NYSE: CF ) , making it the analyst's top pick in the fertilizer space at the expense of downgrading Mosaic.
Shares of Xyratex (Nasdaq: XRTX ) approached a 52-week high -- rising every trading day last week -- as the data storage company thumped Mr. Market's expectations. No one figured that Xyratex would come even close to the $0.69 a share that it rang up a year earlier, but it did.
Xyratex's fiscal-fourth-quarter profit of $0.73 a share was more than twice the $0.33 a share that Wall Street was forecasting.
Finally we have Landec (Nasdaq: LNDC ) parlaying polymer into a plumper profit. Landec's quarterly net income of $0.13 a share landed just ahead of the $0.12 a share the pros were banking on.
It's important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That's the kind of surprise that we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription. If that's not up your alley just yet, you can still check out a free special report detailing the next trillion-dollar revolution.
Either way, come back next week to learn about more stocks that blew the market away in the coming days.