3 Stocks That Blew the Market Away

Why settle for ordinary quarterly reports?

I take a look at three companies that beat market expectations every week, 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 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 site saw earnings spike 34% to $1.29 a share on a pro forma basis. Wall Street was only banking on a profit of $1.05 a share. priceline's showing bucked the trend of travel portals that fell short of market expectations.

LoJack is another topper. The auto tracking specialist posted adjusted net income of $0.12 a share, well shy of the $0.21 a share it earned a year ago. The upside here is that analysts were willing to settle for $0.11 a share in profitability for the quarter. Security is a big theme in a recession, so companies like LoJack and stun-gun maker TASER (Nasdaq: TASR  ) may cash in on fears of heightened criminal intentions out there.

Finally, we have RC2 (Nasdaq: RCRC  ) winning the game. The toy maker delivered earnings of $0.43 a share before gargantuan impairment and write-down charges. Mr. Market was expecting just $0.37 a share on the company's bottom line, and even that may have seemed optimistic. Rival JAKKS Pacific (Nasdaq: JAKK  ) clocked in well shy of Wall Street estimates last week, just as market leaders Hasbro (NYSE: HAS  ) and Mattel (NYSE: MAT  ) set a grim tone for the industry by falling short earlier this month.

The one-time non-cash charges at RC2 sting, of course, but it's refreshing to see the company snap the sector's trend of bottom-line disappointment.

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.