Why settle for ordinary quarterly reports?
Every week, I look at three companies that have beaten market expectations, since I believe that leaving Wall Street's pros with puzzled expressions usually means the companies have more in the tank than the analysts figured. 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 Expedia (Nasdaq: EXPE ) . The online travel portal cleared Wall Street's runway by posting a quarterly profit of $0.21 a share on Thursday. Analysts were expecting earnings of only $0.15. The surprise came at an ideal time, as investors were unloading travel sites earlier in the week over swine flu concerns.
The industry's snapshot will be a little clearer when momentum leader priceline.com (Nasdaq: PCLN ) reports next week, but it's a good sign that both Expedia and travel-deals publisher Travelzoo (Nasdaq: TZOO ) have surpassed Mr. Market's guesstimates this season.
DreamWorks Animation (NYSE: DWA ) is another topper. The computer-animation studio delivered a happy ending by earning $0.71 a share in its first quarter. The pros were settling for just $0.45 a share, which still would have been a healthy advance from the $0.28 it earned a year ago.
Finally, we have Green Mountain Coffee Roasters (Nasdaq: GMCR ) brewing up another hot earnings report. Wall Street figured the company behind the Keurig single-cup brewers would earn $0.36 a share, well above the $0.23 it rang up a year ago. Too low, analysts. Profits more than doubled to $0.50 a share.
The company is proving recession-resistant, and it may actually be thriving in hard times. After all, just because folks aren't hitting Starbucks (Nasdaq: SBUX ) the way they used to, that doesn't mean they aren't getting the java fix elsewhere. The price and convenience of this coffee are resonating with coffee sippers, and the market still hasn't figured that out.
So keep watching the companies that surpass expectations. Over time, doing so 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.
RSS Headlines
Fool UK