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 forecasts in the dust. The companies below all soundly trounced earnings estimates by 20% or more for the third quarter:


CAPS Rating

EPS Surprise

Estimated EPS

% Growth Current Quarter

Estimated Long-Term Growth






Medifast (NYSE:MED)





Rite Aid * (NYSE:RAD)





Stone Energy (NYSE:SGY)





Trina Solar (NYSE:TSL)





Source:; NC=not calculable. * Rite Aid's third quarter ended Nov. 30.

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
As sometimes happens with subsidies, a demand bubble formed in Europe that has fueled a party atmosphere in solar stocks. Shares of Trina Solar rose more than 500% over the past year, while those of Yingli Green Energy (NYSE:YGE) nearly tripled. Yet France ended the celebration by cutting its feed-in tariff by 24% this week, and Germany is saying its own tariff cuts are going to be deeper and occur sooner than had been expected.

When Spain took a meat ax to its subsidies, demand fell by two-thirds and created an excess of inventory that hurt pricing. With France having been a growing market in Europe and Germany dominating as the largest market, this one-two lights-out punch could create havoc for solar players.

Last month, CAPS All-Star member DrtThrwingMonkey suggested that solar investors were running on blind faith in having bid up Trina Solar's shares. But this week, SpiffGriff said the module specialist had a way of surprising the critics.

This is one of my top plays for solar at the moment. They have massive levels of momentum, constantly outperform estimates, positive company guidance, and have demonstrated the ability to increase their gross profit margins over the last year. Even after a 5 month gain of over 100% this stock is still trading at a PEG of .4!

Why not go to Trina Solar's CAPS page and tell us what you think about solar's future?

Chuckles the Clown
Considering the great success the federal government has had running the Medicaid program, it's logical to assume that Obamacare will realize similar savings when it expands control over the health-care industry. Maybe there's a future in stand-up comedy for the politicians pushing this.

Drugstore operator Rite Aid has reported 10 straight quarters of losses and seven consecutive months of declines in same-store sales. It trails Walgreen and CVS Caremark (NYSE:CVS) in the retail pharmacy market, and is threatened by Wal-Mart's presence, too.

If Obamacare becomes a reality, the influx of uninsured and underinsured individuals might sap the margins of bricks-and-mortar pharmacies. Rite Aid recently reported a narrower than expected loss for its latest quarter, so it doesn't really need that added pressure.

The way pharmacy benefit managers were already altering how patients got their prescriptions led CAPS All-Star TSIF to downgrade Rite Aid last month.

Rite Aid Corp is a victim of the current health care market. IN particular, along with [its] peers, [its] lucrative [pharmacies] are being gutted by health plan HMO's and drug supplements requiring the patients to mail order [their] drugs through insurance providers or pay considerably more for the drugs. CVS also recently took a similar hit. Add in competition from [Wal-Mart] and we move up the chain. First it was the local [pharmacies] getting squeezed out and now the larger chains. Rite Aid has never been an outperformer in the markets. Now, however, even a [tourniquet] will not help the flow of bleeding. No institutional investors, a NET NEGATIVE Tangible assets of $2.3 Billion and still falling. Negative income, negative cash flow. 4,900 stores in 31 states. Not much likelihood of a white [knight], since [its] peers are also suffering. This 1927, stood the depression, retail chain is on life support.

Yukking it up
The market's rally has changed from being mostly fueled 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.

Wal-Mart Stores is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.