Why settle for ordinary quarterly reports?
I take a look at three companies that beat market expectations every week, since I believe that it'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 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 Priceline.com (Nasdaq: PCLN). The "name your own price" travel website posted a pro forma third-quarter profit of $2.39 a share. Analysts were only expecting adjusted earnings to clock in at $2.10 a share.
Priceline's report came a week after rival Expedia (Nasdaq: EXPE) and travel deals publisher Travelzoo (Nasdaq: TZOO) missed their quarterly profit targets. Priceline has now beaten Wall Street guesstimates in 10 consecutive quarters.
AirMedia (Nasdaq: AMCN) is another topper. The operator of advertising networks in major Chinese airports earned an adjusted $0.13 a share in its latest quarter, 30% better than last year's $0.10 a share showing and just ahead of Mr. Market's $0.12 target.
Advertising in China remains a growing business, given the resilient economy in the world's most populous nation. Investors have several ways to play this niche, from high-tech outdoor advertising giant Focus Media (Nasdaq: FMCN) to bus and train advertiser VisionChina (Nasdaq: VISN).
Finally, we have Blockbuster (NYSE: BBI) screening an applause-worthy quarter. A boom in the sale of video game hardware and software helped prop up the retailer's third quarter results. Blockbuster posted a deficit of $0.08 a share, half of the $0.16 a share loss that the market was braced for.
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.
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