Don't settle for ordinary quarterly reports.
Every week, I take a look at three companies that beat market expectations, 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 Stratasys (NASDAQ:SSYS) printing out a good report.
3-D printing is a booming industry, and Stratasys is cashing in on the revolution. Printers that crank out actual physical molds and objects continue to get cheaper, and this promises to be one of the more exciting investing arenas in the years to come.
After merely meeting Wall Street expectations on the bottom line three months ago, Stratasys earned $0.40 a share on Friday. The market was banking on net income of $0.37 a share. It's probably not a coincidence that rival 3D Systems (NYSE:DDD) had topped profit estimates during the same quarter after also only meeting expectations three months ago.
Stratasys shares still tumbled on Friday. Uninspiring guidance was the culprit.
Another company that beat the pros but took a hit on its outlook is Baidu (NASDAQ:BIDU). China's leading search engine's quarterly profit of $1.37 a share easily exceeded the $1.28 a share that analysts were forecasting. However, coming up short on the top line -- and an outlook calling for decelerating revenue growth -- turned investors off when it comes to the former dot-com darling.
Finally, we have LinkedIn (NYSE:LNKD.DL) making a great impression. The social networking website with a nose for business rang up a quarterly profit of $0.22 a share. Wall Street was settling for LinkedIn earning half as much, especially after leading operator Facebook (NASDAQ:FB) barely squeezed out a bottom-line beat a week earlier.
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 Baidu, 3D Systems, Facebook, and LinkedIn and has the following options: short NOV 2012 $35.00 calls on 3D Systems and long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Baidu, 3D Systems, Facebook, LinkedIn, and Stratasys. 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.