5 Stocks That Laugh at Wall Street

In these heady 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:

Source: Yahoo! Finance.  

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 companies listed above will have the last laugh.

The joke's on them
After almost two years of generating losses, life and accident insurer Conseco has regained its profitable ways, posting its third consecutive quarter of positive earnings. Once seen as tottering near bankruptcy, the insurer recently received a large vote of confidence from hedge fund manager John Paulson, who agreed to pump $78 million into its operations. This man who made the trade of the century is also purchasing $200 million of the $293 million in convertible notes Conseco is selling.

It also looks like an opportune time to raise cash in the public markets. Conseco's stock has appreciated more than 1,800% since it hit bottom in March, so it is planning to sell $230 million in stock, which will be used to repay some of its $1.3 billion in debt. All of these financial maneuvers should put it on firmer footing, though the CAPS community remains concerned about its positioning.

Some 83% of the 248 members rating Conseco have said they believe it will outperform the broader market, but in the past three months the insurer's stock rating has dropped from four stars to two, indicating an undercurrent of doubt.

In September, CAPS member thinshaw71 suggested that the worst was over, but that a lot still depended on the outcome of health-care reform. Wall Street, though, remains bullish, with all six analysts who cover the company expecting it to outperform.

Ensure your opinion is heard; head over to Conseco's CAPS page and let us know whether Paulson's correctly calling another U-turn.

Chuckles the Clown
The recovering global economy is good news for NVIDIA, which reported that chip demand spiked across all geographies. The market researchers at IDC say that PC microprocessor shipments soared 23% in the third quarter, helping to spur a rally in tech stocks. One analyst thinks chip sales can grow as much as 25% next year, which helped boost Intel (NASDAQ:INTC) and Advanced Micro Devices (NYSE:AMD) shares.

NVIDIA used the growing interest in GPU and graphics chips, primarily from increased demand in China, to power its way to higher revenue, while implementing cost-cutting initiatives to boost earnings. There's so much demand these days that the chip maker is experiencing supply constraints, but it was still able to forecast fourth-quarter results that far exceeded Wall Street's expectations.

CAPS member miatamiss sees NVIDIA's shift in focus to smartphone technology as a key to offsetting any gaps that may be found elsewhere. Indeed, the chip maker said that it saw its mobile solutions gaining momentum along with its new server chips.

Yucking it up
The market's rally has changed from being fueled mostly by low-quality stocks to dragging most others along based on lower year-over-year comparables. If you think there's some funny business afoot, let us know -- head over to Motley Fool CAPS and sound off.