3 Stocks That Blew the Market Away

Don't settle for ordinary quarterly reports.

Each week, I examine three companies that beat market expectations, since I believe that such outperformance is the biggest factor in a stock beating the market. Leaving Wall Street's pros with stunned expressions can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.

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

We can start with Copart (Nasdaq: CPRT  ) . The operator of the country's largest auction for salvage vehicles put the rubber to the road, delivering a profit of $0.52 per diluted share in its latest quarter. Copart earned $0.48 a share from continuing operations a year ago, and Wall Street was banking on a $0.50 a share showing.

It isn't really a surprise to see Copart motoring along nicely. Last summer's "cash for clunkers" campaign created a glut of cars that were required by law to be scrapped rather than resold as used cars. Ford (NYSE: F  ) and even Toyota (NYSE: TM  ) continue to post double-digit monthly sales growth, so clearly, there are even more lemons being traded in these days.

United Natural Foods (Nasdaq: UNFI  ) is riding the wave of popularity for organic edibles. Fiscal third-quarter profits climbed 15% to $0.45 a share, well ahead of the $0.42 a share that analysts were expecting. United Natural Foods stocks supermarkets with more than 60,000 natural, organic, and specialty products. This market-topping performance was easy to predict, after watching Whole Foods Market (Nasdaq: WFMI  ) deliver back-to-back quarters of healthy store-level growth last month.

Finally, we have China Finance Online (Nasdaq: JRJC  ) running with the bulls. The operator of a pair of research websites for individual investors in China stunned the market with an adjusted profit of $0.08 a share, fueled by a 20% surge in premium subscribers. Mr. Market figured that China Finance Online would serve up a small loss for the quarter.

It's important to keep watching companies that surpass expectations. Over time, it will be a lucrative experience for investors, as the market rewards the overachievers. That's the kind of surprise that 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.

Copart and China Finance Online are Motley Fool Rule Breakers selections. Copart, Ford Motor, and Whole Foods Market are Motley Fool Stock Advisor picks. Try any of our Foolish newsletter services today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the stocks in this column. He 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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