Why settle for ordinary quarterly reports?
Every week I take a look at three companies that beat market expectations, since I believe that's the biggest factor in a stock beating the market. 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 over the past few trading days.
We can start with AeroVironment (NASDAQ:AVAV). The maker of unmanned aircraft vehicles saw its fiscal second-quarter profits rise by 71% to $0.41 a share. Analysts were only looking for earnings of $0.27 a share.
The role that major defense contractors will play in President-elect Barack Obama's White House run remains to be seen, but high-tech companies that provide tactical superiority without harming the troops -- like AeroVironment and all-terrain bomb detecting automaton maker iRobot (NASDAQ:IRBT) -- should make out nicely.
Shanda Interactive (NASDAQ:SNDA) is another topper. The pioneer in China's booming online gaming market posted a profit of $0.68 a share in its latest quarter, well ahead of the $0.55 a share that Mr. Market was betting on. Investors shouldn't be surprised here. The company has beaten bottom-line projections for 10 consecutive quarters.
Finally, we have Copart (NASDAQ:CPRT) revving things up. The auto salvage specialist posted net income of $0.44 a share in its latest quarter, narrowly besting the $0.41 a share it scored a year ago and the $0.43 a share in Wall Street guesstimates.
It may not seem like much of a win, but it'll do in this car-weary market. More conventional outlet providers for new and used cars like AutoNation (NYSE:AN) and CarMax (NYSE:KMX) have missed analyst profit targets in their latest quarters, so scrap is golden in retrospect.
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.
CarMax is a Motley Fool Inside Value selection. Shanda Interactive, iRobot, and AeroVironment are Motley Fool Rule Breakers selections. Copart is a Motley Fool Stock Advisor pick. The Fool owns shares of Copart. Try any of our Foolish newsletters today, free for 30 days.
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 Fool has a disclosure policy.