In these heady economic times, Mr. Market seems to enjoy dogpiling on any stock that dares to fall short of analysts' estimates. To defy that trend, we're here to celebrate stocks that didn't merely meet Wall Street's predictions, but laughed in analysts' faces by leaving their miserly forecasts in the dust. The companies below have all soundly trounced earnings estimates by 20% or more in the last quarter:
|
Company
|
CAPS Rating
(out of 5)
|
EPS Surprise
|
Est. EPS
Growth Current Qtr.
|
Est. LT Growth
|
|
Keryx Biopharmaceuticals (Nasdaq: KERX )
|
***
|
111%
|
13%
|
30%
|
|
Lear (NYSE: LEA )
|
**
|
44%
|
99%
|
12%
|
|
OncoGenex Pharmaceuticals (Nasdaq: OGXI )
|
*
|
33%
|
119%
|
NA
|
|
Sonus Networks (Nasdaq: SONS )
|
*****
|
67%
|
100%
|
10%
|
|
TASER (Nasdaq: TASR )
|
***
|
250%
|
200%
|
30%
|
Source: Yahoo.com.
EPS = earnings per share. LT = long-term.
Nonetheless, beating estimates isn't enough to make a stock a winner. Analysts are notoriously lousy at forecasting results, and one-time items can sometimes push earnings over the top. Wall Street professionals typically don't include such extraordinary events in their forecasts.
Rather than focusing only on the past, we'll check whether analysts have a bead on future performance. With help from Motley Fool CAPS, we'll see which of the top companies listed above will have the last laugh.
The joke's on us
Maybe it was a lesson well learned. In the aftermath of its stock getting crushed when a late-stage trial of the diabetic nephropathy drug Sulonex failed to meet expectations, Keryx Biopharmaceuticals has been able to string together a series of positive developments with its other drugs in late-stage trials, particularly perifosine, a therapy for patients with second- or third-line metastatic colon cancer. Last year, it was able to report that when taken in combination with Roche blockbuster Xeloda, patients saw tumor reduction and it looked like they were living longer.
Last month, Keryx updated its results and said that perifosine-Xeloda patients had indeed improved survival rates compared to a placebo, though there was some increase in side effects. It also came to an agreement with the FDA on a late-stage study of the drug's impact, a move that makes it more likely to get approval if it meets its goals in the clinical trial.
Colorectal cancer is the world's third-most commonly reported cancer, meaning there's lots of potential for Keryx's therapy, but also more potential competition. sanofi-aventis (NYSE: SFY ) , for example, pairs up its Eloxatin with Xeloda for early-stage treatment of colorectal cancer. Keryx licenses the rights to perifosine from AEterna Zentaris (Nasdaq: AEZS ) , its developer.
Keryx was seen as ready to take off last December, when it received fast-track status for its white blood cell cancer therapy. It also received orphan drug status for its multiple myeloma therapy, while also conducting late-stage clinical trials for treatment of tumors in bone marrow.
Investors remain upbeat about the company's potential, with 91% of the CAPS members rating the biopharmaceutical marking it to outperform the broad market averages. CAPS member recgraph says that with all the levers at hand, Keryx is one to buy and hold:
This company has ongoing phase III trials of a potential multi cancer blockbuster drug that has been fast tracked for approval by the FDA. The fundamentals look good, lots of cash, small float, much insider buying, excellent management team and zero debt. Plus other important cancer drugs in the pipeline that will benefit the world. Buy and hold for substantial gains, IMHO.
Can it inoculate itself against another Sulonex, though? Give us your diagnosis on the Keryx Biopharmaceuticals CAPS page.
Yucking it up
The market's rally has changed from being mostly fueled by low-quality stocks to dragging most others along based on lower year-over-year comparables. If you think there's some funny business afoot, let us know -- head over to Motley Fool CAPS and sound off.
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