Some companies are just smarter than others. They underpromise. They overdeliver. Whether it's done tactfully, or the company is fortunate enough to have inadequate analysts on its tail, it works. If a company produces better-than-expected earnings on a consistent basis, Wall Street is likely to follow that up by rewarding the company with better-than-expected stock gains. Let's take a look at a few of these beaters that humbled the prognosticators this past week.
We'll start with Coldwater Creek
Investors have been up Coldwater Creek without a paddle, but the company knows where it's going. When I first wrote about it in 1999, the mail-order specialist was bucking the trend that was stunting growth at many of its catalog mailing peers, and making an early dent in cyberspace with its ColdwaterCreek.com website. At the time, Coldwater Creek had just two physical stores open. The company's bricks-and-mortar empire has quickly grown to more than 200 locations today.
Then we have China.com parent CDC
Yes, this is still a far cry from the $1.27 a share that Toll had earned a year earlier. We can all agree that the company's streak of 13 consecutive years of record earnings bites the dust here in 2006. Inventories are starting to build, and buyers are driving harder bargains. However, Toll's share price has been nearly cut in half, so value-hunters may be gearing up for a nibble here.
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 the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Foo l has a disclosure policy.