Earnings estimates can be a funny thing. Analysts tend to bunch themselves around a certain number and then blame the companies when they miss. Whether Wall Street overshot -- or undershot -- a company's ultimate earnings power, they have the gall to blame the company instead of their models.
What can you do about it? Learn from their mistakes. Companies that come out ahead often repeat that feat, since analysts have a tendency of being slow in catching up to these great stories. Let's take a closer look at a few of the companies that humbled the prognosticators this past week.
We'll start with DSW
The chain went public over the summer, and this is its second report since the IPO. I should point out that DSW also managed to come in ahead of projections three months ago. It's a great sign to see a young company that understands how important it is not to disappoint investors after your market debut. DSW had enough to worry about, given the notoriety it gained earlier this year, when hackers were able to break into the company's system and lift credit card information from transactions placed at half of its stores. It was easy to think that shoppers might avoid the chain after the mishap, but I guess you can't stop a determined shopper from a great deal on a perfect pair of stiletto pumps.
This is a sector that investors tend to ignore, though it's clearly doing pretty well at the moment. The Pantry
So keep watching the companies that lap expectations. Over time, it will be a rewarding experience for Foolish investors. It's the kind of surprise that market-watchers relish in the Motley Fool Rule Breakers newsletter service. The strategy has paid off as the average Rule Breaker selection has trounced the S&P 500's market return. Want in? Check out a 30-day trial subscription.
Either way, come back next Monday to learn about more stocks that blew the market away.
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Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the companies mentioned in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.