If you read enough business briefs these days, you'd think companies that weren't just managing to meet earnings expectations were horribly missing estimates. In fact, many companies are doing quite well, thank you very much.

We're here to celebrate those that not only beat Wall Street's predictions but actually laugh in the face of analysts for bringing in such miserly forecasts. 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

Estimated EPS % Growth Next Qtr

Estimated Long-Term Growth

ATP Oil & Gas (NASDAQ:ATPG)

*****

40%

NM

82%

King Pharmaceuticals (NYSE:KG)

****

23%

(18%)

4%

SandRidge Energy (NYSE:SD)

****

92%

(18%)

10%

Myriad Genetics (NASDAQ:MYGN)

****

68%

120%

24%

Mirant (NYSE:MIR)

****

84%

4%

26%

Source: Yahoo! Finance. NM=not meaningful.           

But it's not enough just beating estimates to become a winning stock. Analysts are notoriously lousy at forecasting results, and there could always be one-time items that pushed the earnings ahead. Wall Street professionals typically don't include extraordinary events in their forecasts.

Everyone makes mistakes, so we're not going to look only at the past. We'll check whether analysts have a bead on future performance, too, by enlisting the help of Motley Fool CAPS, the community-intelligence tool for rating both stocks and the stock pickers. With CAPS, we'll see which of these leading companies will have the last laugh.

The joke's on them
One of the recurring themes running through the earnings reports of the three energy-industry jokers was cost containment. ATP Oil & Gas was able to offset declining revenues by cutting expenses, and SandRidge Energy scaled back E&P spending for the full year. Mirant was able to remain profitable by realizing higher fuel hedges while reducing operating costs. Cutting expenses is a necessary management action when times are tough, but you can cut only so far before you hit bone and performance suffers.

At the other end were the pharmas, which increased expenses to keep sales moving forward. Myriad expanded its sales force to boost its business in molecular diagnostic products, while King was able to grow sales of several product lines even though they're under pressure from generics.

The court jester
Yet only one of them earned the belled jester's cap with a top five-star rating. ATP saw revenues plunge by 58% in the second quarter as lower commodity costs, coupled with production cuts from partially selling assets in the North Sea and Gulf of Mexico, ate into operations. With PV-10 estimates slowly climbing with oil prices, however, look for ATP Oil & Gas to rise with it, even with natural gas prices testing new seven-year lows. Similarly situated Delta Petroleum (NASDAQ:DPTR) and Stone Energy (NYSE:SGY) have also had to resort to issuing shares to raise capital.

Its lower cost structure and lower interest expense from paying down $59 million worth of debt over the first six months helped it narrow its loss for the quarter to just $0.12 a share, well ahead of the $0.20 loss analysts were expecting.

Bullish belly laughs
The CAPS community is very bullish on ATP's prospects, as 95% of those rating it believe it will outperform the market. CAPS member fooltobetaxfree introduced the independent oil and gas company to us in May, with the thought that any increase in oil prices would be a slick addition to the bottom line.

I like their ownership. I love the upside to the stock if oil prices go up, which I believe is very likely. I also like their commitment to lowering their debt. I would love to see this stock go to the valuation levels discussed in an article I read. Each scenario would put it over 50. Bought in at 9, will be buying more very soon.

Foolish takeaway
At just 5 times earnings, ATP Oil & Gas is one of the cheapest independents around, particularly when compared with its growth prospects. Even analysts are expecting some monster growth in earnings. It seems that eventually the market will stop playing the fool and come around to appropriately valuing the stock -- in which case you might be the one getting the last laugh if you climb aboard before it takes off.

Got a different take on ATP Oil & Gas? If you think there's some funny business afoot, let us know by heading over to Motley Fool CAPS and sounding off.

Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.