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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 have humbled the pros over the past few trading days.
We can start with Smith & Wesson Holding (Nasdaq: SWHC ) . The gun maker posted an adjusted quarterly profit of $0.28 a share, blowing away -- figuratively, of course -- the $0.18 a share in earnings that Wall Street was targeting.
Smith & Wesson also provided a full-year outlook that's far rosier than what analysts had been projecting. Between the uneasy economic recovery and fears that this summer's movie theater shooting in Colorado may renew the debate for tighter gun control laws, is it any wonder that Smith & Wesson's weaponry is selling briskly these days?
Mattress Firm (Nasdaq: MFRM ) also found the pros sleeping on the job. The mattress retailer's earnings nearly doubled to $0.30 a share, just ahead of the $0.28 a share that was expected.
Shares of Mattress Firm still rolled off the bed, but largely based on the chain's uninspiring sales guidance. Investors probably should've seen this coming. Results were mixed out of the premium bedding niche earlier this summer. Select Comfort issued strong performance, but Tempur-Pedic disappointed investors.
Why does this mixed showing matter? Mattress Firm prominently features Tempur-Pedic's form-fitting mattresses, but it does not sell Select Comfort's air-chambered Sleep Number beds.
Finally, we have Ulta Salon (Nasdasq: ULTA) getting all dolled up like some of its customers. The beauty retailer saw its quarterly net income soar 42% to $0.54 a share. Wall Street was going for a mani-pedi at the $0.51-a-share mark.
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.