Hitting targets may be a great strategy for shooting galleries, but it's only an average one when it comes to corporate earnings. Remember, meeting the all-knowing analysts' targets is what is expected of a company. It's better for investors when these MBA-toting Nostradamus wannabes miss badly by forecasting a lower number than is delivered by the reporting company. When market mavens aim too low, it can be a great sign that the company is about to go on a tear of trouncing estimates in the future -- at least until the market catches up.
That said, let's take a closer look at a few of the companies that humbled the prognosticators this past week.
We'll start with LG Philips
So let's leave WD-40 as a topper with an asterisk. It will have to prove that it has what it takes to blow away the market when its ad budget is running full-throttle, which will more than likely be during the current quarter.
It wasn't all cheery deliveries, as net income from continuing operations dipped despite an 11% uptick in sales. However, as Stephen Simpson pointed out last week, a higher tax rate and financing expenses helped explain the discrepancy. So, yes, even if you're posting lower earnings, you can still blow the market away.
So keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors. That's the kind of surprise that market watchers relish in the 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.
Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the companies mentioned in this story. The Foo l has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.