5 Stocks That Laugh at Wall Street

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, leaving their miserly forecasts in the dust. The companies below have all soundly trounced earnings estimates by 20% or more in the last quarter:

Source: Yahoo! Finance; NA=not available; NM =not measurable.

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
By indirectly regulating gambling houses in Macau through visa restrictions, China's made the share prices of casino operators there more random than a spin of the roulette wheel.

After apparently clamping down last year on visitations into the region -- the only legal place to gamble in China -- the government relaxed its policies to allow people to come back once a month. Casino revenue surged 50% last month year over year, as the money flowed back in. However, it's been rumored that the government is tightening the screws once again, by limiting visitations to Macau from neighboring Guangdong province to just once every other month. The rumored change has caused consternation among casino officials.

Shares of casino operators fell on the news, but casinos are still tapping into the vein of investor sentiment that Macau represents a golden growth opportunity. Wynn Resorts (NASDAQ:WYNN) launched a successful IPO, raising $1.6 billion, and Las Vegas Sands plans to follow suit next month. Now MGM Mirage (NYSE:MGM) wants in on the action, and it's considering an IPO of its own.

Even if China limits visas to Macau, it's become obvious to the operators that the country still represents a rich repository of gambling demand. CAPS member AZBrewer praises Las Vegas Sands' diverse gaming operations:

Don't bet against these guys! Las Vegas will always be a draw to foreign and domestic tourists. And the Macau market will provide great diversification. While they are up significantly from their March 2009 low, there remains significant upside. Use short-term turbulence as buying opportunities.

No laughing matter
Swine flu still gets all the attention, but highly rated CAPS All-Star member rwebankrupt thinks that a rabies vaccine will prove to be the bigger profit driver for Sinovac Biotech: "Rabies will always be a bigger problem for China than Swine Flu and while some wait for a buyout most wait for an Asian listing as Sinovac Biotechnology does not bite the hand that feeds them."

Yet Sinovac's swine flu vaccine received approval for distribution in Mexico recently, and the company will be applying for approval to distribute it in Hong Kong soon. It's also fulfilling existing orders for more than 6 million doses for the Chinese government. Sinovac has also gotten the nod from Hong Kong to distribute its avian flu vaccine there. The biotech also produces vaccines for hepatitis, pandemic flu, encephalitis, and rabies.

Despite all the hysteria that was whipped up a few months ago, it appears that swine flu is turning out to be a lot milder than anticipated. But that doesn't mean the disease won't still prove to be a profitable outcome for vaccine makers or their investors.

Foolish takeaway
Thus far, the market's rally has been mostly fueled by low-quality stocks. Got a different take on Las Vegas Sands or Sinovac? If you think there's some funny business afoot, let us know -- head over to Motley Fool CAPS and sound off.