Can earnings be managed? Sure. Even Enron was able to pull it off for a spell. Investors are well served, though, to take a closer look at companies that consistently beat profit targets. That's because there is often something fundamentally improving that even the sharp-minded community of analysts have yet to figure out. It's an opportunity in the making for those angling for an inefficient market to be ultimately corrected.
Let's take a closer look at a few of the companies that humbled the prognosticators this past week.
We'll start with Cedar Fair
I figured that the pieces were in place to narrow that fiscal shortcoming. It turns out that even my own optimism fell short of reality. Cedar Fair posted a profit of $0.04 a share for the period. Even if you back out certain tax benefits, you still arrive at the first December-quarter operating profit in the company's history. Nice.
American Science & Engineering
Online advertising continues to be the major driver for The Knot. Just as other niche sites like iVillage
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, too: The average Rule Breakers 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.
CNET is a Motley Fool Rule Breakers selection.
Longtime Fool contributor Rick Munarriz is a fan of toppers. He does own units in Cedar Fair. The Foo l has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.