Expectations aren't carved in stone. However, they are published for all to see, and when a company laps Wall Street's profit targets, it's a great time to dig deeper into the company. What did analysts miss? Will they keep missing it? Some companies wind up being perpetual market thumpers. More than likely, that will translate into stock gains that are also better than the norm.
Let's take a look at a few of these beaters that humbled the prognosticators this past week.
We'll start with Hewlett-Packard
Then again, analysts should be used to eating HP's dust by now. Since Mark Hurd took over as CEO in April of last year, his cost-cutting initiatives have produced an uninterrupted streak of better-than-expected bottom-line results.
Shareholders had a right to be concerned. Shanda's dominance of China's die-hard gamers had been dwindling in recent quarters as rivals NetEase
In and of itself, Shanda's report wasn't a beauty. Net revenues fell by a quarter and profits fell by a third. However, that's the beauty of market forecasts. If the pessimism is overdone, it's just as sweet as when analysts aren't optimistic enough to get it right.
Then we turn the page to Books-A-Million
It wasn't a stellar showing at the top line, even though the company did outperform larger competitor Barnes & Noble
So, keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors as the market rewards the overachievers. That's the kind of surprise we look for in the Rule Breakers newsletter service. 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 in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.