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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 Conn's (NASDAQ: CONN ) .
The consumer electronics retailer posted better-than-expected quarterly results heading into the critical holiday shopping period. Conn's came through with an adjusted profit of $0.38 a share, well ahead of the $0.28 a share that Wall Street was forecasting.
Investors shouldn't be surprised. Conn's has been landing ahead of the pros all year. Yes, its larger rival Best Buy (NYSE: BBY ) is in trouble. Best Buy is struggling to ring up sales, and margins are getting pinched. Then again, the same thing could've been said a couple of years ago about Conn's peer Circuit City. Weakness at one retailer doesn't mean that every similar company is in a funk.
The market wasn't pleased with Conn's decision to offer 5.5 million shares in a secondary offering, but the dilutive deal will help beef up the retailer's balance sheet.
AeroVironment (NASDAQ: AVAV ) also flew past Wall Street. The maker of unmanned aircraft vehicles earned $0.39 a share in its latest quarter. Analysts were betting on a profit of just $0.22 a share. The strong showing helped AeroVironment soar in a week that saw the Nasdaq Composite glide lower. AeroVironment's stock rose nearly 10% on the week.
Finally, we have Francesca's Holdings (NASDAQ: FRAN ) dressing up nicely. The boutique operator's profit of $0.24 a share was comfortably ahead of the $0.22 a share that the underdressed analysts were targeting. Shareholders of the trendy chain should be used to this by now. The retailer has beaten Wall Street estimates every single quarter since going public during the summer of last year.
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.