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 pros over the past few trading days.
We can start with Guess? (NYSE: GES ) .
The apparel specialist may have seen revenue slip by 2% and profitability take an even bigger hit, but it's all about matching reality to expectations. Guess? shares popped higher on the report, as its net income of $0.30 a share was comfortably above the $0.26 a share that Wall Street was forecasting.
Cracker Barrel (Nasdaq: CBRL ) may be battling activist shareholder Biglari Holdings (NYSE: BIG ) , but it seems as if the throwback eatery chain with attached gift shops is doing just fine on its own. Adjusted earnings soared 48% to $0.86 a share in its latest quarter.
Analysts were settling for a profit of just $0.75 a share, but what else is new? Cracker Barrel has landed ahead of the pros every quarter over the past year.
Finally we have MakeMyTrip (Nasdaq: MMYT ) turning getaways into getting away from where the prognosticators are perched. India's leading travel portal scored a profit of $0.08 a share in its latest quarter. Analysts were expecting net income of $0.06 a share.
MakeMyTrip is one of the few pure plays on India's promising yet still very nascent dot-com industry. Portal operator Rediff.com -- another of the rare Indian Internet companies that trade on a stateside exchange -- reported Tuesday morning.
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.