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 humbled the pros over the past few trading days.
We can start with Alpha Natural Resources (NASDAQOTH: ANRZQ ) .
The coal producer posted an adjusted fourth-quarter deficit of $0.19 a share. A loss may not sound like good news -- on a 25% year-over-year slide in revenue, to boot -- but analysts were braced for a deficit of $0.55 a share.
The climate is still rocky for coal producers, but things may not be as bad as pessimists have been thinking.
Pharmacyclics (NASDAQ: PCYC ) was another winner. The small biotech's quarterly profit of $0.56 a share blew past the $0.31 a share that the market was expecting. There was also good news for Pharmacyclics on the regulatory front. The FDA granted Breakthrough Therapy Designation status to its promising treatment for relapsed mantle cell lymphoma and Waldenstrom's macroglobulinemia.
Finally, we have Zillow (NASDAQ: ZG ) on the move. The fast-growing real estate website was only supposed to break even in its latest quarter, but Zillow came through with a net income of $0.08 a share. It was a good week for the leading residential real estate websites, as Zillow peer Trulia (NYSE: TRLA.DL ) also moved on robust quarterly results. Trulia led all New York Stock Exchange stocks with its nearly 42% pop on the week.
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.
Either way, come back next week to learn about more stocks that blew the market away in the coming days.
One more winner
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.