3 Stocks That Blew the Market Away

Every week, I look at a few companies that exceeded their profit targets. Leaving Wall Street's pros with quizzical looks usually means that the companies have more in the tank than analysts had figured, and capital appreciation often follows.

Let's examine a few companies that humbled the prognosticators over the past few trading days.

We can start with Disney (NYSE: DIS). Mr. Market doesn't smell a rat in the Mickey Mouse company, and it's probably because the family-entertainment giant has done nothing but handily beat analyst quarterly expectations since CEO Bob Iger took over two years ago.

Earnings from continuing operations at Disney climbed 23% to $0.58 a share, well ahead of the $0.51 a share that the market was looking for. Investors knew that Hannah Montana and ESPN would deliver the goods, but few were looking for Disney's theme-parks business to post double-digit percentage gains on the top line.

Vonage (NYSE: VG) is another topper. One doesn't hear nearly enough good news out of the Web-based telephone-service provider, so we may as well celebrate its $0.06-per-share quarterly deficit. The showing was better than both the $0.47 a share it lost a year ago and the $0.07 loss that shareholders were braced for. Subscribers grew by 30,000 to 2.6 million lines during the most recent three-month period.

The challenges to Vonage are real. As consumers use their cell phones to replace landlines, telco giants such as AT&T (NYSE: T) bundle discounted phone service to broadband and cable subscribers, and outlets such as eBay's (Nasdaq: EBAY) Skype offer a plethora of cheaper online chat connectivity, Vonage isn't out of the woods. However, you have to respect a company narrowing its deficits as it grows its reach.

Finally, we have True Religion (Nasdaq: TRLG) making believers out of the fickle fashion world. The high-end denim specialist earned $0.29 a share, comfortably ahead of the $0.26-per-share fitting room where the pros were squeezing into their jeans. Skeptics love to bet against True Religion -- the stock often has one of the highest short interest ratios in the market. I'm not sure the doubters will ever learn, since True Religion has surpassed guesstimates in each of the past three quarters.

So keep watching the companies that beat 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.