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, 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!

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 us
The success of the Windows 7 operating system is a marked contrast from the generally accepted notion that Microsoft's Vista was a failure. An odd definition of "failure," really, considering Vista sold 40 million copies in its first four months, though sales did decline from there. But when you see that Windows 7 had already sold 60 million copies as of early January according to Internet metrics calculator Net Applications, making it the fastest selling OS in history, everything else pales in comparison.

Since that time, Windows 7 share has grown even higher. For some perspective, its market share is nearly now half of Vista's despite Vista having an additional three years on the market. In fact, all the various iterations of Windows still control 92% of the market (XP, Vista, and 7), with Apple's (NASDAQ:AAPL) Mac OSX a distant 6% according to StatCounter.

Microsoft once again appears to be on a roll, and that has investors stoked about its future. CAPS member GnuIdeas says the wizards in Redmond have found their groove again:

Xbox Live, Windows7, Bing, Office2010, Halo Reach, Natal, ZuneHD, Exchange, SQLServer, and now WinMobile 7. Microsoft is making the best products again. They're going to be rolling in profits by the end of the year.

More than 13,000 members of the CAPS community have weighed in on the software specialist, with 86% of them looking for it to outperform the market. Are you one of the believers in its renaissance or do you fall into the camp of perennial detractors? Let us know on the Microsoft CAPS page.

Headwinds or tailwinds?
It looks like Boeing has taken wing on its Dreamliner finally getting liftoff, though if you look at its defense business you might think the aircraft leader is running into turbulence.

After years of delays, the "7-late-7" was able to go airborne in December with a successful maiden voyage. It's not just because the jumbo plane has gotten altitude that Boeing is soaring, but another oft-delayed plane, the 747-8 freighter had a successful first flight too. The commercial division is finally pulling its own weight.

Good thing, because that's coming just as the military wing seems to be stuck on the tarmac. It's manned fighter plane business is getting outflanked by rivals and the budgeting process. The F-22 Raptor Boeing subcontracts for Lockheed Martin (NYSE:LMT) is in funding limbo and its F/A-18 won't be bridging any perceived gaps in Lockheed's F-35 fighter plane roll-out. There's also a question of whether it will be able to effectively compete for F/A-18 business in India.

Regardless, investors like CAPS member ScottishPete feel that Boeing's broad diversity of offerings give it enough of an edge to succeed:

Strong line of aircraft that fill both large and smaller [airlines] product needs. Military presence provides occasional "jackpots" that support the commercial airline sales peaks and valleys. As long as we love invading foreign countries Boeing will continue to receive armament replacement orders.

Yucking 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.