Every week, I 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 Gmarket (Nasdaq: GMKT), a recent Rule Breakers recommendation. The South Korean online marketplace that is beating eBay (Nasdaq: EBAY) at its own game saw fourth-quarter profits nearly double to $0.26 a share. Analysts were perched at the $0.23 a share mark.
Investors knew it would be a good quarter for the fast-growing company, which had faulted third-quarter weakness on atypically warm weather crimping apparel sales three months ago. A cooler climate would mean hot profits in the fourth quarter.
Ctrip.com (Nasdaq: CTRP) is another topper. The leading Chinese travel website earned $0.27 a share in its final quarter of 2007, flying past Wall Street's profit target of $0.21 a share.
It's hard not to get excited about Ctrip. Beijing just opened the world's largest airport terminal, as the city prepares to host the Olympic Games in a few months. Travel portals such as Ctrip and eLong (Nasdaq: LONG) are a few of the companies likely to cash in during the Olympics.
Finally, we have Bidz.com (Nasdaq: BIDZ) showing some bling in its latest quarter. The company that sells jewelry through entertaining auctions earned $0.29 a share during its holiday quarter. The consensus estimate called for Bidz to earn just $0.17 a share.
Bidz doesn't dabble in the high-end stuff, as Blue Nile (Nasdaq: NILE) does. The average winning bid is just $169. Sure, you can find affordable jewelry trinkets at Overstock.com (Nasdaq: OSTK) or even on auction at eBay, but Bidz provides a niche-specific site that gets right to heart of adrenaline-pumping real-time auctions.
So, keep watching the companies that lap expectations. Over time, it will be a rewarding 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 subscription.
Either way, come back next Monday to learn about more stocks that blew the market away.
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