3 Stocks That Blew the Market Away

• Email
• Share
• Print

Why settle for ordinary quarterly reports?

I believe that the biggest factor in a stock's ability to beat the market is to beat the market's expectations. That's why I look every week at three companies that have humbled Wall Street's pros. If a company has more in the tank than the analysts figured, capital appreciation often follows.

Let's look, then, at a few companies that humbled the prognosticators over the past few trading days.

We can start with Green Mountain Coffee Roasters (Nasdaq: GMCR). The java heavy behind the popular Keurig single-cup brewers and the high-margin K-Cup refills posted a profit of $0.36 a share in its latest quarter, more than double last year's showing. Analysts thought they were aiming high with their bottom-line target of $0.28 a share.

Green Mountain has now zoomed past the pros in each of the past seven quarters. The stock is trading lower this morning, as a result of announcing a secondary stock offering, a dilutive move that makes it harder for the K-Cup darling to keep humiliating Wall Street. 

DreamWorks Animation (NYSE: DWA) also drew well. The computer-animation studio posted net income of $0.30 a share, nearly doubling Mr. Market's expectations of $0.16 a share.

The victory dance isn't entirely self-choreographed. A third of DreamWorks Animation's profit is the result of reworking its licensing deal with video-game developer Activision Blizzard (Nasdaq: ATVI). It still would have barreled through the guesstimates, which is more than can be said for family-entertainment behemoth Disney (NYSE: DIS), which roughly fell in line with street projections on Thursday.

Finally, we have Buffalo Wild Wings (Nasdaq: BWLD) flying high. The chicken-wings specialist notched a quarterly profit of $0.39 a share, 24% higher than last year's bottom line. Analysts were settling for net income of just $0.34 a share. The chain has been trouncing expectations since a rare miss four quarters ago.

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.

Start investing today -- just $7 per trade with Scottrade. Or find the broker that’s right for you.