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 Apollo Group (Nasdaq: APOL). The for-profit educator moved to the head of the class by posting a profit of $0.85 a share in its latest quarter, ahead of the flat $0.78 a share that Wall Street was expecting.
Higher-learning enablers such as Apollo, Career Education (Nasdaq: CECO), DeVry (NYSE: DV), and Corinthian Colleges (Nasdaq: COCO) rarely move in lockstep, but a soft economy isn't necessarily a niche-killer for the industry, as adults brush up on skills to make themselves worth more in a retooled workplace.
Constellation Brands (NYSE: STZ) is another topper. The distiller poured an adjusted fiscal first-quarter profit of $0.34 a share, on the strength of its focus on premium wines and imported brews. Mr. Market was raising his shot glass only up to the $0.31-a-share mark.
Finally, we have Family Dollar (NYSE: FDO) bringing home the bacon. The thrift store chain drummed up net income of $0.46 a share, blowing past analyst guesstimates of $0.40. A stock buyback helped propel the bottom line 15% higher on a per-share basis, but investors knew to include that in their models. The company also raised its guidance for the current quarter, a move that bodes well for chains like Big Lots (NYSE: BIG), which pander to penny-pinchers.
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 Motley Fool Rule Breakers newsletter service. Want in on the stock recommendations and analysis we have to offer? Check out a free 30-day trial subscription.
Either way, come back next Monday to learn about more stocks that blew the market away.
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