3 Stocks That Blew the Market Away

Every week, I take a look at a few companies that lapped their profit targets. Leaving Wall Street's pros with quizzical looks on their faces can be a good thing. It usually means that the companies have more in the tank than analysts figured, and capital appreciation often follows.

Let's take a look at a few companies that humbled the prognosticators this past week.

We can start with Yum! Brands (NYSE: YUM  ) . The fast-food giant that owns the Taco Bell, Pizza Hut, and KFC chains earned $0.50 a share in its latest quarter. Wall Street was rolling its burrito at the $0.45-per-share mark. Strong growth in China helped offset a stateside decline in sales.

Costco (Nasdaq: COST  ) is another topper. The warehouse club retailer earned $0.91 a share before a revenue recognition charge, well ahead of the $0.83 per share that analysts were expecting.

See the trend? Thrifty diners at Yum!. Thrifty shoppers at Costco. Both reports came during the same week that found penny-pinching havens McDonald's (NYSE: MCD  ) and Wal-Mart (NYSE: WMT  ) waxingupbeat about their own near-term prospects. It's the kind of trend that makes you wonder if a generic-soft-drink maker like Cott (NYSE: COT  ) is taking away business from full-priced pop stars Coke (NYSE: KO  ) and Pepsi.

Well, not so fast. PepsiCo (NYSE: PEP  ) is the third market beater worth looking at. The leader in salty snacks and silver medalist in soda earned $0.99 per share during its fiscal third quarter. The pros were looking for a $0.96-per-stub showing.

Keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors as the market rewards the overachievers. That's the kind of surprise we look for in the Motley Fool Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription. It's free.

Either way, come back next Monday to learn about more stocks that blew the market away.


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