Every week, I look at three companies that have beaten market expectations. Leaving Wall Street's pros with quizzical looks usually means that the companies have more in the tank than those analysts figured, and capital appreciation often follows.
So let's review a few companies that humbled the prognosticators over the past few trading days.
It was a good week for Chinese growth stocks: Home Inns & Hotels (Nasdaq: HMIN ) beat estimates, and NetEase.com (Nasdaq: NTES ) followed suit. But let's start our weekly review with Ctrip.com (Nasdaq: CTRP ) . China's leading online travel website saw its second-quarter profits climb 35% to $0.25 a share, well ahead of the $0.20 a share that Wall Street was expecting.
Ctrip is a regular on this list. The company has handily beaten analyst expectations in each of the six previous quarters. There will be hiccups along the way, but Ctrip is still following the trend that investors want to see when they seek out companies that will outperform the market.
Shares of Autodesk (Nasdaq: ADSK ) soared 12% on Friday, after the design-software specialist posted adjusted earnings of $0.56 a share for its latest quarter. Mr. Market was looking for just a $0.52-per-share performance, after Autodesk generated net income of $0.44 a share a year earlier. Autodesk painted a pretty picture, and not just because it provides the tools to make those pictures.
Wal-Mart (NYSE: WMT ) is another topper. The world's leading retailer's $0.87-per-share quarterly profit sneaked past Wall Street's $0.84 guesstimate. Sure, by providing essential goods at rock-bottom prices, Wal-Mart is in a sweet spot. But it's not just Wal-Mart enjoying some good news for a change. Even more conventional department-store chains, such as Kohl's (NYSE: KSS ) and Nordstrom (NYSE: JWN ) , delivered better-than-expected bottom-line results.
So keep watching the companies that beat expectations. Over time, doing so will be a rewarding experience for investors, because 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.