Every week, I take a look at a few companies that lapped their profit targets. Leaving Wall Street's pros with quizzical looks on their faces can be a good thing. It usually means that the companies have more in the tank than analysts figured, and capital appreciation often follows.
Let's take a look at a few companies that humbled the prognosticators over the past few trading days.
We can start with LoopNet (Nasdaq: LOOP). The online marketplace for commercial real estate had another winning quarter, earning $0.14 a share in the fourth quarter. Analysts were looking for a profit of just $0.13 a share. It may not be by much, but LoopNet has now beaten expectations in each of its first seven quarters as a public company.
Does this mean that commercial real estate is the antidote to the residential malaise? Not exactly. Sure, commercial realty has held up better than the housing market, but even LoopNet is feeling the pinch, with higher cancellations from its premium memberships. It still feels good to beat the skeptics, though.
Activision (Nasdaq: ATVI) was another topper. The video game giant rocked the house with the success of Guitar Hero III. During a quarter in which rivals like THQ (Nasdaq: THQI) and Electronic Arts (Nasdaq: ERTS) weren't quite in tune, Activision earned $0.90 a share. That is well ahead of both the $0.48 a share it earned a year ago and the $0.80 a share that Mr. Market had expected.
Finally, we have Greenfield Online (Nasdaq: SRVY) getting high marks from Wall Street. The Web-based survey-taking specialist earned $0.17 a share in its latest quarter. The pros would have settled for $0.15 a share.
It seemed as if online poll-smiths like Greenfield and Harris Interactive (Nasdaq: HPOL) were toast last year when Facebook began offering similar data-grabbing features. Greenfield apparently has plenty of life left, which is impressive because the company's gains were organic.
So, keep watching the companies that lap expectations. Over time, it will be an enriching experience for investors as the market rewards the overachievers. That's the kind of surprise we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial.
Either way, come back next Monday to learn about more stocks that blew the market away.
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