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3 Stocks That Blew the Market Away

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 this past week.

We'll begin with Ruby Tuesday (NYSE: RT  ) . The casual dining chain served up a quarterly profit of $0.27 a share in its latest quarter. The company may have earned a robust $0.46 a share a year ago, but analysts were only looking for a profit of $0.20 a share this time around.

Despite a sharp drop in comps at the unit level, and stingy food costs, Ruby Tuesday's performance is commendable. Competitors like Cheesecake Factory (Nasdaq: CAKE  ) have struggled. When even shares of Chipotle Mexican Grill (NYSE: CMG  ) (NYSE: CMG-B  ) take a sharp tumble -- as investors worry about the ability of the industry's star pupil to shake off the economic doldrums -- any win is a good win.

Marriott International (NYSE: MAR  ) is another topper. The hotelier checked in with earnings of $0.51 a share, just ahead of the $0.49-a-share profit it posted a year ago. Marriott delivered growth in its revenue per available room, a critical metric in its niche, but it also put up full-year guidance that hints at softening over the next few quarters.

Finally, we have Rockwell Collins (NYSE: COL  ) armed for bull. The defense contractor and aviation products specialist posted wider margins on the way to growing earnings by 24% to $1.07 a share. Wall Street was parked in the $1.02 a share hangar.

Having a defense angle has helped companies offset weaknesses elsewhere. A company like iRobot (Nasdaq: IRBT  ) -- which makes both the Roomba robotic vacuum cleaner as well as military robotics that help smoke out roadside explosives -- can lean on government contracts during the lean times. Rockwell Collins is apparently doing fine even without the crutch, as it grew on both the commercial and government contracting sides.

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.

Chipotle Mexican Grill is a Motley Fool Hidden Gems selection. iRobot and Chipotle are Motley Fool Rule Breakers recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 15, 2008, at 1:34 PM, dad7732 wrote:

    So, you think that Rockwell Collins is headed for the bull ??? I think not, maybe the BULL-S as it's trading currently at 45.97 and headed even deeper in the tank. I'm not worried as I inherited quite a lot of shares of COL and it just sits in my portfolio. Don't lose if you don't sell, right? Maybe we should buy more and wait for the aerospace industry to recover. The defense dept will be re-awarding that tanker contract at the end of this year. Care to speculate on that re COL and their close tie with Boeing?

  • Report this Comment On July 15, 2008, at 1:40 PM, dad7732 wrote:

    In your "Had you invested ........" comments you mention AOL et al that were good picks back then and I agree. As a point of interest as hindsight is always 20/20, I invested $25,000 in Johnson/Johnson 30 years ago and re-invested the dividends back to JanJ. Care to take a guess at what that's worth today? I listened to the experts then and continue to "listen" today. Says something doesn't it when the experts say to invest for the long-term unless you're so filthy rich it doesn't matter.

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Related Tickers

10/21/2016 4:00 PM
CAKE $50.35 Up +0.69 +1.39%
The Cheesecake Fac… CAPS Rating: ***
CMG $411.94 Up +6.84 +1.69%
Chipotle Mexican G… CAPS Rating: ****
CMG-B.DL $0.00 Down +0.00 +0.00%
COL $84.46 Up +0.83 +0.99%
Rockwell Collins CAPS Rating: ****
IRBT $44.64 Down -1.05 -2.30%
iRobot CAPS Rating: *****
MAR $67.14 Down -0.26 -0.39%
Marriott Internati… CAPS Rating: ****
RT $3.10 Up +0.06 +1.97%
Ruby Tuesday CAPS Rating: *