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3 Stocks That Blew the Market Away

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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 Cisco (Nasdaq: CSCO  ) . The networking-equipment giant posted a profit of $0.42 a share on a non-GAAP basis for its fiscal third quarter, well ahead of both the $0.30 it generated a year ago and the $0.38 that Wall Street was targeting. The quarter included an extra week, but analysts already knew that in preparing their profit models.

Whole Foods Market (Nasdaq: WFMI  ) also barreled past the pros. The organic supermarket chain saw its quarterly profits more than double to $0.39 a share. Analysts were settling for net income of $0.33. The upscale grocer struggled during the darkest stretches of the recession, but Whole Foods has now rebounded with back-to-back quarters of positive comps.

Finally, we have Disney (NYSE: DIS  ) . The family-entertainment provider's adjusted earnings rose by 12% to $0.48 a share. Mr. Market figured that Disney would earn just $0.46 a share for its fiscal second quarter. It was a great quarter for the media moguls, as Time Warner (NYSE: TWX  ) , Viacom, Discovery Communications, and News Corp. (Nasdaq: NWSA  ) all landed ahead of the prognosticators during the same three months.

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.

And come back next Monday to learn about more stocks that blew the market away.

Walt Disney is a Motley Fool Inside Value recommendation. Walt Disney and Whole Foods Market are Motley Fool Stock Advisor picks. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of toppers. He owns shares of Disney 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.

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Related Tickers

10/25/2016 10:06 AM
CSCO $30.38 Down -0.08 -0.26%
Cisco Systems CAPS Rating: ****
DIS $93.18 Down -0.19 -0.20%
Walt Disney CAPS Rating: *****
WFM $28.38 Up +0.11 +0.39%
Whole Foods Market CAPS Rating: ****
FOXA $25.65 Up +0.08 +0.29%
Twenty-First Centu… CAPS Rating: ***
TWX $87.28 Up +0.54 +0.62%
Time Warner CAPS Rating: ***