In these dour 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:


CAPS Rating

EPS Surprise

Est. EPS % Growth, Current Qtr

Est. 5-Year Growth

American International Group (NYSE:AIG)





AnnTaylor Stores (NYSE:ANN)





E*Trade Financial (NASDAQ:ETFC)





Ford (NYSE:F)





Rentech (NYSE:RTK)





Source: Yahoo! Finance; NA=not available.

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 them
If the market forecasters have it right, Ford will be king of the U.S. automaker heap by 2015, as it surpasses General Motors in sales. But IHS Global Insight predicts that Ford, the most financially sound American carmaker, will still place second to Toyota (NYSE:TM), which the analyst projects will sell about 3 million cars annually. Ford and GM will follow closely behind, while a fading Chrysler will sell an estimated 1.25 million cars -- just about the same as a surging Hyundai.

There's a bit of optimism baked into these projections, of course. For one, analysts assume that U.S. auto sales will claw their way back to the 17 million-vehicle mark by 2014, a milestone last reached in 2000. Those numbers also depend upon a recovery in the housing market, improved unemployment, and pent-up demand for substantial purchases.

That's a lot of assumptions -- but highly rated CAPS All-Star icon149 agrees with them:

pent up demand do to recent dismal car sales numbers accross the entire industry. Ford has the most competitive products in their recent History. More trouble for Chrysler (no competitive products to speak of) and peoples distaste for GM (sucking the Government teet) spells more domestic auto buyers in ford show rooms.

We'll also have to keep the September sales numbers in perspective, since the overhang from the Cash for Clunkers program depressed the reported figures. August showed an annual rate of 14.5 million cars, an anomaly fueled by the government's cash payouts. Likewise, industry executives say September is an anomaly, too. A smoothed-out view has the industry achieving a 9 million to 9.5 million vehicle run rate. Now we just need to see whether automakers can gain traction in October.

Blakjak87 sees open roads ahead for Ford:

New, environmentally focused product lineup rolling out now and especially through 2010. Ford has demonstrated an understanding of what spurs consumer car-buying, recession or not. Staying out of the government's pocket has done wonders for its reputation throughout the last 6 months, and Ford will continue to grow. A slowdown in sales due to the jolt from CARS will see this stock dip in the short-term, but [Ford] is a great long-term bet.

Ford also aims to expand its newfound strength to China, where markets are still frothy. Auto sales in China soared 82% in August from the year-ago period. If you're seeking a play on the Chinese car market, Ford's decision to open a third plant there bodes well.

However, investors might also want to consider parts maker Johnson Controls (NYSE:JCI). The company has a 50% market share in the auto seat industry, and it manages diversified business lines, including an HVAC business and a power-solutions segment. Johnson might offer investors a less risky way to capitalize on China's booming market for cars.

Foolish takeaway
Thus far, the market's rally has been mostly fueled by low-quality stocks. Got a different take on Ford? 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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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.