Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
Don't settle for ordinary quarterly reports.
I take a look at three companies that beat market expectations every week, 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 pros over the past few trading days.
We can start with 7 Days (Nasdaq: SVN ) . The fast-growing lodging provider in China checked in with an adjusted profit of $0.70 a share, blowing past analysts targeting $0.48 a share in earnings. All three of the publicly traded Chinese hospitality specialists reported last week, but 7 Days was the only winner. Rivals Home Inns & Hotels (Nasdaq: HMIN ) and China Lodging Group (Nasdaq: HTHT ) actually posted quarterly results that fell woefully short of Wall Street forecasts.
China Automotive Systems (Nasdaq: CAAS ) also drove ahead of the market. The supplier of power steering components and systems did post a small dip in net sales and a slightly larger decline in net income, but its $0.19 a share showing on the bottom line was well ahead of the $0.15-a-share mark where Mr. Market was parked.
This one is truly a refreshing surprise, since China Automotive had come up short on the bottom line in its four previous quarterly reports.
Finally, we have 3SBio (Nasdaq: SSRX ) on the move. The provider of cost-effective research, development, manufacturing, and distribution of pharmaceutical products came through with a blowout quarter, fueled by a 38% surge in net revenue.
Wall Street was aggressive here, expecting profitability to nearly triple. Well, 3SBio's net earnings of $0.16 a share actually more than tripled last year's $0.05 a share showing.
Moving in the right direction
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.