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 Michael Kors (CPRI -3.04%). The fast-growing retailer of high-end handbags and accessories hit a fresh all-time high after posting another blowout quarter. Kors saw its profitability more than double to $0.50 a share, boosted by a stunning 36.7% spike in same-store sales. Wall Street was only forecasting net income of $0.39 a share, but what else is new? Kors has been consistently beating analyst estimates by double-digit percentage margins since going public less than two years ago.
OmniVision Technologies (NASDAQ: OVTI) also proved to be a pretty picture. Shares of the image-sensor maker soared 28% last week after it delivered a great fiscal snapshot. The pros were banking on earnings of $0.21 a share on $318.9 million in revenue, but OmniVision came through with a profit of $0.31 a share with $336.2 million on the top line.
Finally, we have Krispy Kreme (KKD) heating up like its signature doughnuts. The stock catapulted 31% higher last week after its sweet report. Income rose 33% -- twice as strong as the market was expecting -- to $0.20 a share. Despite all of the knocks about the health disadvantages at Krispy Kreme, same-store sales have risen for 18 quarters in a row.
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.
