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3 Stocks That Blew the Market Away

By Rick Munarriz - Oct 29, 2012 at 10:32AM

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These three companies earned more than Wall Street was expecting.

Don't settle for ordinary quarterly reports.

I take a look at three companies that beat market expectations every week, since I believe that it's the biggest factor in a stock beating the market. Leaving Wall Street's pros with stunned expressions can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.

Let's take a look at a few companies that humbled the pros over the past few trading days.

We can start with Proto Labs (PRLB -0.68%).

The maker of custom parts for prototyping and short-run production prides itself on its speedy turnaround times. It's not the only way that Proto Labs exceeds expectations. Analysts were expecting a quarterly profit of $0.23 a share out of the company on Thursday. It came through with earnings of $0.29 a share.

Even though it just went public earlier this year, Proto Labs has landed ahead of the pros in each of its first three quarters as a public company. What's even better is that the disparity between what it earns and what Wall Street thinks it will earn is expanding.

Six months ago, Proto Labs earned 14% more than analysts were expecting. Three months ago it was a beat by 15%. Last week it landed 26% ahead of Wall Street's income forecast.

Panera Bread (PNRA) also baked up something good. The chain of quick-service restaurants specializing in baked goods, soups, and salads generated a profit of $1.24 in its latest quarter. The market was settling for earnings of $1.19 a share.

Panera's showing comes at a time when other growth-oriented eatery stocks have come up short. Buffalo Wild Wings (BWLD) earned less than analysts were projecting last week, and Chipotle Mexican Grill (CMG 2.00%) came up short the week before that.

Finally, we have IMAX (IMAX 1.69%).

The company behind supersize and super-sensory movie experiences saw its adjusted earnings nearly double to $0.26 a share, well ahead of the $0.21 a share that market watchers were betting on. Healthy expansion has helped offset an otherwise disappointing year at the box office.

Moving in the right direction
It's important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That's the kind of surprise that we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.

Either way, come back next week to learn about more stocks that blew the market away in the coming days.

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Buffalo Wild Wings, Chipotle Mexican Grill, IMAX, and Panera Bread. Motley Fool newsletter services recommend Buffalo Wild Wings, Chipotle Mexican Grill, IMAX, Panera Bread, and Proto Labs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

IMAX Corporation Stock Quote
IMAX Corporation
IMAX
$16.85 (1.69%) $0.28
Panera Bread Company Stock Quote
Panera Bread Company
PNRA
Proto Labs, Inc. Stock Quote
Proto Labs, Inc.
PRLB
$46.43 (-0.68%) $0.32
Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
CMG
$1,663.70 (2.00%) $32.61
Buffalo Wild Wings, Inc. Stock Quote
Buffalo Wild Wings, Inc.
BWLD

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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