In these heady economic times, Mr. Market seems to enjoy dog-piling 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 will upend analysts' apple cart by recording profits. You sometimes can't actually calculate by how much they beat the estimates (seventh-grade math tells us we can't divide by zero or less and get a meaningful result!), but it's still useful to understand why they were able to exceed expectations.


CAPS Rating
(out of 5)

Last Qtr. EPS Estimate

Last Qtr. EPS Actual

Est. LT Growth

Apple (Nasdaq: AAPL)





Massey Energy (NYSE: MEE)





Sotheby's (NYSE: BID)





Source: Yahoo! Finance and CAPS. LT = long-term. EPS = earnings per share.

The above three companies beat estimates recently, but that isn't necessarily enough to make the stocks winners. 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.

Laugh, clown, laugh!
The big story for Apple right now is the introduction of the iPhone 4, as it sold 1.7 million units in just three days, its most successful product launch ever. Not that it went off without hitches such as poorly designed antenna placement cutting signal strength depending on how you hold the phone (to which Steve Jobs replied, "Just avoid holding it that way"); user data collection concerns, like that which recently ensnared Google (Nasdaq: GOOG); and inadequate supply for the demand.

Companies could have worse problems than the latter concern, of course, but it does give Research In Motion (Nasdaq: RIMM) and Motorola (NYSE: MOT) a wedge as they'll soon be introducing their own new devices. Not every customer who didn't get an iPhone will automatically choose a RIM BlackBerry, but companies don't like to leave profits on the table.

Highly rated CAPS All-Star DarthMaul09 says the days of a value-priced Apple are long behind us, even if we see the stock market tank:

The real test of this company will come with the next major downturn in the market. The irrational sell off in early 2009 is unlikely to happen again as investors now realize that Apple is more than Steve Jobs. I suspect that Apple will actually go up in price with the next sell off as investors start looking for quality and safety. If Apple starts paying out a small dividend, the investor base would likely expand further.

Light at the end of the tunnel
In the days following the April West Virginia mine explosion, the nation turned its gaze upon Massey Energy, painted as a miner reckless about employee safety. The coal miner is fighting back, suing its federal regulator, which it says prevented it from installing scrubbers that might have prevented the explosion.

Moreover, Massey claims that cracks found in the mine floor, which may have allowed the methane gas that ignited to enter the shaft, were previously known to the federal Mine Safety and Health Administration. Additional charges of regulatory ineptitude, if true, could relieve a lot of the pressure on Massey.

Yet in the wake of BP's Gulf oil disaster, where regulatory oversight was also found lacking, it ought to dispel the notion that federal regulation is a panacea. Layers of bureaucracy can't prevent accidents from occurring, though they can wreak economic harm as business is buried in cost.

CAPS member SamTheHobbit believes political expediency will allow Massey to rise from its current depressed level:

The bottom fishers are back. I suspect that the stock may be back near $50 by the end of the year, following a summer of high gas prices and the thought of a long cold winter. Jobs will remain scarce, so preventing the miners from getting back to work will probably not be a good political move.

Dim the lights
OK, maybe sanity is returning. For a while it seemed investors had taken leave of their senses as they bid up shares of art auction house Sotheby's to levels it hadn't seen since 2007, almost as if everyone had forgotten the recession we had just endured. But a failure to sell a Monet by rival auctioneer Christie's has investors possibly rethinking the health and strength of the art market. After peaking at just under $40 a share in April, Sotheby's stock has slid all the way down to under $24 a stub, helped along by Monet.

Considering the Christie's auction otherwise produced record bids, it's a bit premature to say the art market is doomed and Sotheby's will fall further. At less than 13 times 2011 earnings, Sotheby's trades at only the slightest premium to the knocked-about eBay (Nasdaq: EBAY), but based on long-term growth prospects looks to be the better value (eBay is expected to grow at just 11.5% per year).

Go to the Sotheby's CAPS page and place your bid on whether it will outperform the markets going forward.

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.

Sotheby's is a Motley Fool Hidden Gems pick. Google is a Rule Breakers recommendation. Apple and eBay are Stock Advisor selections. Motley Fool Options has recommended a bull call spread position on eBay.

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