3 Stocks That Blew the Market Away

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Why settle for ordinary quarterly reports?

Every week, I look at three companies that have beaten market expectations. Leaving Wall Street's pros with puzzled expressions usually means that the companies they underestimated have more in the tank than expected -- and capital appreciation often follows.

So let's look at a few companies that humbled the prognosticators over the past few trading days.

We can start with United Natural Foods (Nasdaq: UNFI). The organic-foodstuffs distributor posted a quarterly profit of $0.39 a share, well ahead of both last year's $0.30-per-share profit and the $0.34 that analysts were expecting. Organic grocers such as Whole Foods Market (Nasdaq: WFMI) are struggling to improve their bottom lines, but United Natural Foods is simply broadening its distribution.

Chinese online-gaming pioneer Shanda Interactive (Nasdaq: SNDA) also beat the pros. It earned $0.78 a share, when Mr. Market was willing to settle for just $0.74. Perhaps this performance isn't that much of a surprise: Peers including Changyou.com (Nasdaq: CYOU) and Perfect World (Nasdaq: PWRD) also topped Wall Street's profit targets last month.

Finally, we have Conn's (Nasdaq: CONN) matching last year's $0.47-per-share showing on the bottom line, before favorable one-time items. The consumer-electronics retailer will take that stalemate, though, since analysts were banking on just $0.44 a share in net income. Life isn't going too bad without Circuit City for smaller players such as Conn's and hhgregg (NYSE: HGG), as they nibble away at the market share that once belonged to the now-liquidated superstore chain.

Watching the companies that surpass expectations will be a rewarding experience for investors, because 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.