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 Constellation Brands (NYSE:STZ). The company behind Mondavi wines, Svedka vodkas, and other inhibition-releasing libations did see profitability slip a bit to $0.71 a share, but Wall Street was banking on net income of only $0.54 a share.
Constellation Brands is also raising its bottom-line guidance for the entire year, now expecting to earn at least $2 a share.
Cal-Maine (NASDAQ:CALM) didn't lay an egg. The distributor of shell eggs saw its earnings more than triple to $0.39 a share. Wall Street was holding out for a profit of $0.33 a share. Cal-Maine managed to deliver blowout quarterly results despite flat volume growth in its bread-and-butter shell egg business. Higher prices and heartier margins led the way.
Finally we have Marriott (NASDAQ:MAR) checking in. The lodging giant's bottom line clocked in at $0.44 a share, well ahead of the $0.40-a-share mark, where the pros had rested their pillows.
It wasn't all good news for the hotelier. Investors and analysts didn't appreciate Marriott's uninspiring outlook for the current quarter. It's now been nearly a year since the company spun off its timeshare and upscale residence club business as Marriott Vacations Worldwide (NYSE:VAC). The move was done to eliminate some of the real estate risk from the namesake company, but last week's warning proves that you can never shake off all risk.
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.
Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.