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 GameStop (NYSE: GME ) . The video game retailer posted a quarterly profit of $1.14 a share, besting the market's expectations of $1.12 a share in earnings. It's hard not to like the Motley Fool Stock Advisor recommendation, given its platform-agnostic play on all of the leading video game systems and titles. It doesn't matter whether Activision (Nasdaq: ATVI ) or Take-Two (Nasdaq: TTWO ) has the flavor-of-the-month game; GameStop is there to cash in no matter what.
I have also made the case for GameStop as a recession-resistant company, since it scores its thickest margins on buying used games and gear and reselling them. It certainly doesn't hurt that GameStop's comps shot up an amazing 24.7% for all of 2007.
Adobe (Nasdaq: ADBE ) is another topper. The publishing-software pioneer earned $0.48 a share, well ahead of Wall Street's target of $0.45 a share. Shareholders should be used to seeing Adobe come out on top. It has beaten analyst estimates in all but one quarter over the past six years.
Finally, we have Focus Media (Nasdaq: FMCN ) coming into focus. China's leading ad broadcaster -- with a fleet of billboards, monitors, and websites getting sponsors seen and heard -- earned $0.52 a share in its latest quarter. Analysts were perched at the $0.48-a-share mark. If the pros are missing now, just wait until ad companies like Focus and AirMedia (Nasdaq: AMCN ) really start rolling when the Olympics pull into town in a few months.
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.