Why settle for ordinary quarterly reports?
I believe that the biggest factor in a stock's ability to beat the market is its ability 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 Intel (Nasdaq: INTC ) . The leading maker of microprocessors earned $0.40 a share on record gross margins. The "Intel Inside" company was supposed to earn just $0.30 a share, after delivering a profit of just $0.04 a share a year earlier. This news should bode well for rival Advanced Micro Devices (NYSE: AMD ) when it reports later this month.
JPMorgan Chase (NYSE: JPM ) also beat the pros, by earning $0.74 a share in its latest quarter. It wasn't traditional banking that led JPMorgan Chase to blow past Wall Street's $0.61-per-share profit target. Investment banking and trading accounted for most of the company's $3.3 billion in net income.
There are plenty of big banking names reporting this week, so JPMorgan Chase's report would seem to suggest an upbeat report out of investment banking heavy Goldman Sachs (NYSE: GS ) but weaker performances out of regional bankers BancFirst (Nasdaq: BANF ) and Hudson City Bancorp (Nasdaq: HCBK ) .
Finally, we have Shuffle Master (Nasdaq: SHFL ) happy with the cards it has been dealt. The maker of automatic card shufflers and other casino equipment earned $0.12 a share, flat with last year's showing but well ahead of the $0.09 a share that analysts were betting on.
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.
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