When a company laps analyst targets, it's more than just a cry for respect. It can be a compelling investing situation in which Wall Street has failed to appreciate a company's true earnings power. If the trend continues, higher share prices are likely to follow.
Let's take a look at a few of these beaters that humbled the prognosticators this past week.
We'll start with DSW
Sure, bigger shoes may not be welcome fits in retail, but when net income is coming in bigger, you don't need a shoehorn to appreciate the performance. Surprised by DSW's prowess? You shouldn't be. Three months ago, the company also beat fiscal first-quarter profit-per-share targets by a nickel. DSW is no penny loafer.
Then we have Layne Christensen
The company's second quarter was its most productive in 2004 and 2005. The company is expecting the same seasonal preference to take place here in 2006. That's OK. If this is as good as it gets for the company this year, it's pretty darn good.
And finally, there's TiVo
It doesn't hurt that TiVo -- a Motley Fool Stock Advisor newsletter recommendation -- has also been flexing a little patent muscle and striking licensing deals with beefy partners.
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.