Don't settle for ordinary quarterly reports.
I take a look at three companies that beat 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 Oracle (Nasdaq: ORCL ) .
The enterprise software giant has an uncanny knack of landing ahead of the pros. Whether CEO Larry Ellison is a master of managing earnings or analysts are just slow, Oracle rarely misses on the bottom line. It wasn't any different this time around. Wall Street was holding out for a profit of $0.78 a share, and the software company came through with net income of $0.82 a share.
Rite Aid (NYSE: RAD ) is also prescribing a beat.
The drugstore chain isn't close to turning a profit, but it continues to inch in the right direction. It has now come through with narrower year-over-year deficits in six consecutive quarters. Its latest victory came on Thursday when Rite Aid's quarterly loss of $0.03 a share was better than both the $0.07 a share it served up last year and the $0.04 a share deficit that the pros were projecting.
Finally, we have Red Hat (NYSE: RHT ) tipping its hat to the market. Shares of the Linux-based software subscription provider took a hit on weak billings, but the company still managed to beat out the prognosticators calling for an adjusted profit of $0.27 a share.
Red Hat earned $0.30 a share, but Mr. Market can be finicky sometimes.
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.