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 Costco (NASDAQ:COST).
The leading warehouse club operator came through with bulk-sized profit margins in its latest quarter. A healthy 5% pop in same-store sales shows that consumers as well as mom and pop businesses continue to flock to Costco for their shopping needs.
Costco's net income of $1.10 a share clocked in ahead of both the $0.90 a share it posted a year earlier and the $1.06 a share that Wall Street was targeting.
We also have Peregrine Pharmaceuticals (NASDAQ: PPHM) besting the pros.
Peregrine is a small biotech that's tapping monoclonal antibodies for cancer-tackling solutions. Peregrine's still losing money at this stage, but its quarterly deficit of $0.04 a share was far narrower than the $0.07 a share in red ink that analysts were forecasting.
Peregrine's been doing a good job of keeping its cash burn in check. It has posted smaller deficits than Wall Street was expecting in each of the past four quarters. Investors tend to gloss over the bottom line when it comes to small companies toiling on medical solutions. They're eyeing the bigger prize. However, the bottom line in the near term still matters. Delcath Systems (NASDAQ: DCTH) -- another small upstart aiming for oncology applications with its drug/device combination product clocked in with its third straight quarter of delivering smaller losses than the pros were prognosticating.
Finally, we have Renren (NYSE:RENN) edging out Mr. Market. China's leading search engine saw its revenue soar 49% on the strength of strong online gaming revenue. Renren's quarterly loss of $0.06 a share was marginally better than the $0.07 a share that Wall Street was predicting.
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.