3 Stocks That Blew the Market Away

Every week, I take a look at a few companies that lapped their profit targets. Leaving Wall Street's pros with quizzical looks on their faces can be a good thing. It usually means that the companies have more in the tank than analysts figured, and capital appreciation often follows.

Let's take a look at a few companies that humbled the prognosticators this past week.

We'll start with Hasbro (NYSE:HAS). The toy-making giant was in tune with what shoppers wanted over the holidays, earning $0.74 a share before charges related to warrants. That was well above the $0.61 the company earned a year earlier and the $0.67 the pros were looking for.

It's an especially impressive performance considering that Star Wars-licensed toys fueled the company's 2005 results. It had to come through with its own lines this time -- and it did, thanks to strength in Playskool, Nerf, and its signature board games. Revenues may have inched just 4% higher, but the margins are a lot sweeter when you're selling your own brands.

Video game maker Atari (NASDAQ:ATAR) also showed up to play. These days, the company that ushered in the video game console era is relegated to the role of a bit player on the software side, but it's not a bad place to be. In the quarter ended in December, Atari's top line was cut in half, but the company wound up posting a profit of $0.13 a share from continuing operations. Atari posted a loss a year ago, and Wall Street was expecting the red ink to flow even thicker this time around.

Can Atari do more with less? Apparently, there is nothing wrong with growing its own Test Drive franchise, dabbling in licensed properties like Dragonball Z, and dipping into its rich heritage.

Then we have Disney (NYSE:DIS). The family entertainment giant earned $0.50 a share in its first quarter. It's awfully sweet to grow earnings by 43% when analysts are looking for a mere 11% advance.

Investors probably should have seen it coming, though. Disney has done nothing but lap market expectations over the past two years. It also had the benefit of releasing Cars and Pirates of the Caribbean: Dead Man's Chest -- the two biggest films of the summer -- on DVD in the quarter.

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.

Disney and Hasbro are Motley Fool Stock Advisor picks.

Longtime Fool contributor Rick Munarriz is a fan of toppers. He does own shares of Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.