3 Stocks That Blew the Market Away

By Rick Aristotle Munarriz | More Articles
August 17, 2009 | Comments (1)

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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 over the past few trading days. If a company has more in the tank than the analysts figured, capital appreciation often follows.

We can start with Lifeway (Nasdaq: LWAY ) . The country's leading distributor of kefir -- a probiotic dairy beverage that's popular with Eastern Europeans -- saw earnings triple to $0.15 a share in its latest quarter. Lifeway's results obliterated Wall Street's bottom-line expectations of $0.07 a share.

Wal-Mart (NYSE: WMT ) clocked in with a quarterly profit of $0.88 a share. Analysts were perched at the $0.86 mark, and that's not including a $0.04-per-share hit that Wal-Mart suffered as a result of the strengthening dollar.

Wal-Mart rival Target (NYSE: TGT ) reports this week, so keep Wal-Mart's performance in mind. The market may have overestimated retailer weakness. Even mainstream mall chains that aren't discounters have held up well relative to expectations, with American Apparel (NYSE: APP ) , Urban Outfitters (Nasdaq: URBN ) , and Macy's (NYSE: M ) all topping Mr. Market's profit targets lately.

Finally, we have Sara Lee (NYSE: SLE ) with a slice of pound cake. The food giant posted a loss of $0.02 a share, but that includes a laundry list of charges that add up to $0.31 a share. Remove the one-time hits, and Sara Lee would have earned $0.29 a share, comfortably ahead of its $0.24-per-share profit target.

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.

Don't have regrets about missing out on great stocks at today's low prices. Read what Fool contributor Selena Maranjian is saying about top stocks for the next 20 years.

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Longtime Fool contributor Rick Munarriz is a fan of toppers. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On August 17, 2009, at 11:02 AM, madmilker wrote:

People in America need to realize jus what got America in this shape…”cheap” yes so-call cheap items from a foreign land.
quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!
Now! if there be 182 country’s making items for the world to buy and they have only 5% of the pie in China…duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there…. but with the “yuan” going up in value and the US dollar going down…all the foreign items that the American consumer buys thinking it is cheap has went up in price.
People…its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the “we the people” have to turn to the “second” largest employer in America(Uncle Sam) to sell “we the people” debt in order to get all them dollars back!
50 years ago a foreigner would had given their left nut for a US dollar or a Hershey’s chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think “MADE IN AMERICA.”
quote*"Considering that there are over 30,000 ships at sea this morning," writes James Carlton, director of the Williams College-Mystic Seaport Maritime Studies Program, in an e-mail, "the total number of organisms and species in this global 'bioflow' on the morning your readers read your piece could be staggering - billions of individuals, and thousands of species."
Indeed, scientists have long considered ballast water the primary way invasive aquatic organisms are introduced. From the zebra mussel's arrival in the Great Lakes, to an American jellyfish severely disrupting Black Sea fisheries, the potential costs of accidental introduction of a species to new homes can be tremendous. Aquatic invasives cost the US $9 billion yearly, according to estimates by David Pimentel, professor emeritus of ecology and evolutionary biology at Cornell University in Ithaca, N.Y. Zebra and quagga mussels (a cousin to the zebra) alone cost the $1 billion annually.*end quote!
tat is $9 billion a year in hidden taxes to all Americans...
cheap ain't chic and it cost America............jobs!
---------
do you people really think tat by having their Global Procurement in China it is there to buy American made.
and with the American consumer so tight with a George Washington tat their breath smells like sh!! and they squeak when they walk didn't have anythig to do with a 1.5% drop in same store sales....
and they are gonna stay like tat until the corporate @ssholes in America bring the jobs back home.... cause RETAIL makes nothing!
sad tat the turnips in D. C. tat can't pout p^ss out of a boot with the instructions on the heel can't see tat.
support your town..........shop around!
made in America............priceless!

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