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3 Stocks That Blew the Market Away

By Rick Munarriz – Dec 10, 2012 at 10:26AM

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These three companies earned a lot more than analysts were expecting.

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 Conn's (CONN -8.17%).

The consumer electronics retailer posted better-than-expected quarterly results heading into the critical holiday shopping period. Conn's came through with an adjusted profit of $0.38 a share, well ahead of the $0.28 a share that Wall Street was forecasting.

Investors shouldn't be surprised. Conn's has been landing ahead of the pros all year. Yes, its larger rival Best Buy (BBY -2.67%) is in trouble. Best Buy is struggling to ring up sales, and margins are getting pinched. Then again, the same thing could've been said a couple of years ago about Conn's peer Circuit City. Weakness at one retailer doesn't mean that every similar company is in a funk.

The market wasn't pleased with Conn's decision to offer 5.5 million shares in a secondary offering, but the dilutive deal will help beef up the retailer's balance sheet.

AeroVironment (AVAV 1.13%) also flew past Wall Street. The maker of unmanned aircraft vehicles earned $0.39 a share in its latest quarter. Analysts were betting on a profit of just $0.22 a share. The strong showing helped AeroVironment soar in a week that saw the Nasdaq Composite glide lower. AeroVironment's stock rose nearly 10% on the week.

Finally, we have Francesca's Holdings (FRAN) dressing up nicely. The boutique operator's profit of $0.24 a share was comfortably ahead of the $0.22 a share that the underdressed analysts were targeting. Shareholders of the trendy chain should be used to this by now. The retailer has beaten Wall Street estimates every single quarter since going public during the summer of last year.

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Best Buy. Motley Fool newsletter services recommend AeroVironment. 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

Francesca's Holdings Corporation Stock Quote
Francesca's Holdings Corporation
FRAN
Conn's, Inc. Stock Quote
Conn's, Inc.
CONN
$7.08 (-8.17%) $0.63
AeroVironment, Inc. Stock Quote
AeroVironment, Inc.
AVAV
$83.36 (1.13%) $0.93
Best Buy Co., Inc. Stock Quote
Best Buy Co., Inc.
BBY
$63.34 (-2.67%) $-1.74

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

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