Why settle for ordinary quarterly reports?
Every week, I take a look at three companies that beat market expectations, because 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 Hewlett-Packard (NYSE: HPQ). The PC and printing giant posted quarterly earnings of $1.03 a share, ahead of the $1.01 a share that the market was expecting.
Sure, it didn't exactly catch the market by surprise. The company had leaked its market-thumping profit a week earlier. It's still a win. Who said the PC market was soft? When Apple (Nasdaq: AAPL) blew past analyst guesstimates last month, most figured it was an anomaly. Apple has been actively gaining market share lately and is a serial winner. However, now that HP and Dell (Nasdaq: DELL) have both cruised past Mr. Market's profit targets in recent days, aren't they all winners?
Tiffany (NYSE: TIF) is another topper. The upscale jeweler generated net income of $0.35 a share from continuing operations during the third quarter. Wall Street was wrapping its ring finger around the $0.25-a-share mark. It's a refreshing report, especially after jewelers like Zale (NYSE: ZLC) offline and Blue Nile (Nasdaq: NILE) online have come up short in their latest quarters.
Finally, we have TiVo (Nasdaq: TIVO) really beating the market. The company posted a loss of $0.01 a share before a huge legal settlement windfall. It may be a weaker showing than the surprising profits that TiVo delivered during this year's first two quarters, but Wall Street was expecting a deficit of $0.06 a share.
So, keep watching the companies that top 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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