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.

Sometimes a company will be forecast to lose money, but it'll upend the analysts' apple cart by recording profits. You can't actually calculate by how much they beat the estimates (seventh-grade math tells us we can't divide by zero or less!), but it's still useful to understand why they were able to exceed expectations.


CAPS Rating

Latest Quarter EPS Estimate

Latest Quarter EPS Actual

Estimated LT Growth

ADC Telecommunications





Golden Star Resources (NYSE: GSS)





McMoRan Exploration (NYSE: MMR)





Montpelier Re (NYSE: MRH)





Take-Two Interactive






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 read on future performance. With help from Motley Fool CAPS, we'll see which of the top companies listed above will have the last laugh.

Laugh, clown, laugh!
The shallow waters of the Gulf of Mexico continue to show promise for renewed oil discoveries, as McMoRan Exploration's Davy Jones ultra-deep prospect in 20 feet of water shows. Top-notch hydrocarbon-bearing sands were found below 27,300 feet, and if confirmed, could make the area one of the biggest discoveries there in decades.

The Fool's natural resources guru Toby Shute explained earlier this year the significance of this discovery, pointing out that none other than ExxonMobil (NYSE: XOM) had one drilled in the area in 2007 but abandoned it because of the difficulty such deep wells represent. McMoRan's ability to persevere here is not to be taken lightly.

CAPS member egobasher says the discovery and renewed interest in going deep helps raise the valuation profile of this driller:

Undervalued lease assets and new discovery. Quote from MMR "The 59 percent increase in bids for Shelf tracts compared with the year-ago lease sale is consistent with our view that there is significant hydrocarbon potential in shallow water at deeper depths."

An ill wind blowing
Insuring against catastrophic events can wreak havoc on the company providing the insurance as well as on the lives the catastrophe touches. While we can't change the outcome of the latter, Montpelier Re is showing why its progress from a monoline property catastrophe reinsurer to a diversified global reinsurer will benefit investors.

Last year, Montpelier Re's results suffered a serious blow from Hurricanes Gustav and Ike in 2008, storms that also hit reinsurers XL Capital (NYSE: XL) and Partner Re (NYSE: PRE) hard. By going global and including specialty lines of business in its underwriting, Montpelier Re's net premiums jumped 15% this year while underwriting income increased 16%. At the same time, the reinsurer's combined ratio, which measures the percentage of premiums an insurer has to pay out in claims and expenses, improved to 48.7% from 63.4% last year.

Yet the risks still exist for natural disasters to upend plans. The recent earthquake in Chile, for example, is expected to cost it as much as $100 million. CAPS members are willing to put up with that risk, however, as 96% of the nearly 2,500 members who rated the reinsurer believe it will outperform the broader market averages over time.

The joke's on us
Financier George Soros has called gold the "ultimate bubble," but that hasn't stopped him from establishing large positions in Golden Star Resources and putting SPDR Gold Shares ETF (NYSE: GLD) at the top of his portfolio last year.

With out-of-control government spending driving huge deficits, gold production soaring, and gold sales showing glittering returns, there are plenty of reasons Golden Star should strike a rich investor vein.

Yet gold prices seem to have stalled and never hit $2,000 an ounce, let alone the more exuberant suggestions of $5,000. Some smart Fools think you'd have to be an idiot to buy gold today.

Though neither idiots or small-f fools, CAPS members remain committed to the bull argument for gold, and more specifically for Golden Star Resources. Of the members rating the junior gold miner, 94% have marked it to outperform, with only a slightly lower percentage of All-Stars agreeing with that assessment.

Head over to the Gold Star Resources CAPS page and dig up your own nugget of optimism -- will it continue to shine in 2010?

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.

Take-Two Interactive Software is a Motley Fool Rule Breakers pick. Montpelier Re Holdings is a Motley Fool Stock Advisor selection and a Motley Fool Hidden Gems 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.