Why settle for ordinary quarterly reports?
Each week I take a look at three companies that beat market expectations, since that (in my humble opinion) is the biggest factor in a stock beating the market. Leaving Wall Street's pros with puzzled 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 Research In Motion (Nasdaq: RIMM). It was definitely BlackBerry-picking season, as the smartphone giant earned $0.90 a share in its latest quarter, besting both the $0.72 a share it earned a year ago and the $0.84 a share that analysts were expecting.
Cynics didn't think that RIM had what it took. There have certainly been plenty of new smartphones released since BlackBerry hit the market. Between Apple's (Nasdaq: AAPL) iPhone, Google's (Nasdaq: GOOG) Android-powered device, and buzz building for the upcoming Palm (Nasdaq: PALM) Pre, did anyone really think that RIM would gain 3.9 million net subscribers in its latest quarter during this sour economy?
Well, RIM did, clearly earning its place in this weekly wrap-up.
CarMax (NYSE: KMX) is another topper. Used car sales have held up relatively better than new auto showrooms, leading to a quarterly profit of $0.17 a share at CarMax. Wall Street was only expecting a meager showing of $0.02 a share in net income.
Finally, we have Apollo Group (Nasdaq: APOL) heading to the front of the class with another strong quarter. Earnings clocked in at $0.77 a share for the leading online educator, blowing past analyst guesstimates of $0.65 a share. The stock did take a hit on the report, as investors focused on the troublesome growth of enrollees in default. However, it's hard to imagine the for-profit educators slowing down in a time when folks need to refresh their workforce skills.
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.
Like this article? Get our best articles delivered direct to your inbox at no cost. Sign up for Foolwatch Weekly by entering your email below.
Terms & Conditions
RSS Headlines
Fool UK