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3 Stocks That Blew the Market Away

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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 Deckers Outdoor (NYSE: DECK  ) .

The company behind Ugg boots and other stylish yet rugged outdoor footwear saw its shares move 15% higher last week after posting better-than-expected results.

It wasn't pretty. Revenue only inched 2% higher, and profitability fell 23% to $2.77 a share as rising costs of sheepskin and other materials mauled margins. However, $2.77 a share is actually well ahead of the $2.57 a share that analysts were modeling.

Dendreon (NASDAQOTH: DNDNQ  ) also came through with solid results. The drugmaker's deficit of $0.26 a share was less than half the red ink that Wall Street was targeting. This is a welcome development at Dendreon, as it had posted larger losses than analysts were banking on for 10 consecutive quarters until late last year.

Shares of Dendreon didn't move on the beat, and there's a good reason for that. Its flagship drug is Provenge, a costly yet compelling treatment for late-stage prostate cancer. Sales were up sequentially -- and that's encouraging -- but Dendreon warned of softness for the current quarter.

Finally, we have ZAGG (NASDAQ: ZAGG  ) . The heavily shorted maker of accessories for tablets and smartphones generated a profit of $0.37 a share after backing out a non-cash impairment charge. Analysts were settling for net income of $0.29 a share.

Net sales had soared 30% at ZAGG, boosted by strong sales of keyboards that attach to tablets. Yes, ZAGG isn't just about its invisibleSHIELD protective film covering anymore.

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.

Resurgence, or dead-cat bounce?
Shares of Dendreon have surged in recent months, with the stock gaining new life from the depths of late 2012. Has the company really solved its underlying problems, or are investors setting themselves up for more disappointment? Our new premium research report on Dendreon answers these questions, and many more, while also outlining just how Dendreon intends to regain its former glory. Claim your copy, and a year of free analyst updates, by clicking here now.


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Rick Munarriz
TMFBreakerRick

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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Related Tickers

9/4/2015 4:02 PM
DECK $62.72 Down -1.37 -2.14%
Deckers Outdoor CAPS Rating: ****
DNDNQ $0.03 Down +0.00 +0.00%
Dendreon Corp CAPS Rating: **
ZAGG $7.19 Up +0.07 +0.98%
ZAGG Incorporated CAPS Rating: **