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 Calavo Growers (NASDAQ: CVGW ) . The avocado picker and maker of guacamole products managed to overcome a dip in revenue on lower avocado prices to surpass expectations. Calavo's quarterly profit of $0.42 a share is ahead of both the $0.41 a share that Wall Street was expecting and the mere $0.25 a share that it posted a year earlier.
Mosaic (NYSE: MOS ) also beat the pros. The producer of concentrated phosphate and potash crop nutrients kicked off the week with encouraging news. It's teaming up with PotashCorp (NYSE: POT ) and Agrium (NYSE: AGU ) to sell fertilizer to China's Sinofert Holdings. The deal covers a whopping million tons of potash during the first half of 2013.
Mosaic then capped off the week by posting a quarterly profit of $1.05 a share. Yes, this was well short of the $1.40 a share it posted a year earlier, but analysts were only targeting net income of $0.94 a share.
Finally, we have Landec (NASDAQ: LNDC ) beating the market. Landec's decision to focus on food and biomedical materials is paying off. Landec's quarterly earnings of $0.19 a share blew past the $0.16 a share that the market was forecasting.
Investors should be used to this by now. Landec has delivered a larger profit than analysts expected in each of the past eight quarters.
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 Motley Fool co-founder David Gardner looks for in his investments, and it's helped him crush the market in his Stock Advisor and Rule Breakers portfolios for years. Next week, David is reopening his flagship Supernova service for investors. Learn more about how he picks his winners with a free, personal tour. Inside you’ll discover the science behind his market-trouncing returns -- and how you can get in on them. Just click here now for instant access.