3 Stocks That Blew the Market Away

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Why settle for ordinary quarterly reports?

Each week, I take a look at three companies that beat market expectations, since I believe that's the biggest factor in a stock beating the market. Leaving Wall Street's pros with quizzical looks on their faces can be a good thing. It usually means that 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 Copart (Nasdaq: CPRT). The reseller of salvaged cars to scrap dealers and rebuilders for export resale had another strong quarter, earning $0.48 a share before a one-time tax adjustment. That is marginally better than the $0.46 a share that Wall Street was expecting, but let's put this into perspective.

Earlier in the week, used-car dealer CarMax (NYSE: KMX) and auto-parts retailer AutoZone (NYSE: AZO) missed the market's profit estimates. These are all companies that were supposed to benefit in a climate with softer new-car sales, but Copart is the real winner.

RedHat (NYSE: RHT) is another topper. The software developer that's marketing commercial solutions to users of the open-source Linux platform generated an adjusted profit of $0.20 a share, ahead of the $0.17 a share it posted a year ago and the $0.18-a-share mark where analysts were perched.

Finally, we have Nike (NYSE: NKE) taking its old "just do it" marketing mantra to heart. The athletic-footwear maker earned $1.03 a share, blowing past the market's $0.92-a-share guesstimate.

Shareholders have a right to be spoiled by Nike. The company has topped expectations in each of the past five quarters. The same can't be said for other fading footwear brands like Crocs (Nasdaq: CROX) and Heelys (Nasdaq: HLYS). Profitability plunged at Crocs in its most recent quarter, while Heelys posted a deficit for the period.

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.