Why settle for ordinary quarterly reports?
I believe that the biggest factor in a stock's ability to beat the market is to beat the market's expectations. That's why I look every week at three companies that have humbled Wall Street's pros over the past few trading days. If a company has more in the tank than the analysts figured, capital appreciation often follows.
We can start with Jackson Hewitt Tax Services (NYSE:JTX). The country's second-largest tax specialist posted a loss of $0.67 a share, narrower than the $0.71 deficit that analysts were banking on. Delivering less red ink than expected during a seasonally forgettable time for tax-prep companies may not seem like much of a feat, but market leader H&R Block (NYSE:HRB) actually posted a wider loss than Wall Street was targeting a day later.
Jos. A. Bank Clothiers (NASDAQ:JOSB) hit a 52-week high after the dressy-duds retailer saw quarterly profits soar by 41% to $0.68 a share. Underdressed pros were settling for net income of only $0.54 a share.
Shanda Interactive (NASDAQ:SNDA) is growing nicely as China's pioneer of online gaming. Earnings rocketed by 53% to $0.90 a share, comfortably ahead of the Wall Street's profit projections of $0.84.
Investors probably saw Shanda's victory dance coming, since smaller peers Perfect World (NASDAQ:PWRD) and Changyou.com (NASDAQ:CYOU) also exceeded expectations last month.
So keep watching the companies that surpass expectations. Over time, doing so 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.
Perfect World and Shanda Interactive are Motley Fool Rule Breakers selections. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz is a fan of toppers. He owns no shares in any of the stocks in this column and 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.
