Why settle for ordinary quarterly reports?

I take a look at three companies that beat market expectations every week, since I believe that it's the biggest factor in a stock beating the market. Leaving Wall Street's pros with puzzled looks on their faces can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.

Let's take a look at a few companies that humbled the prognosticators over the past few trading days.

We can start with Chipotle Mexican Grill (NYSE:CMG). The quick-service restaurant chain saw its net income spike 86% in its latest quarter. The burrito roller's profit of $0.99 a share was well above analyst guesstimates of $0.81 a share.

Chipotle is a great example of a perpetual market-thumper. Wall Street truly doesn't have a clue about this one, given the way it consistently underestimates its profitability. Let's go over each of the company's quarters in 2009.


Est. EPS



Q1 2009




Q2 2009




Q3 2009




Q4 2009




Source: Yahoo! Finance.

Chipotle isn't just surpassing its marks: It's obliterating them.

Activision Blizzard (NASDAQ:ATVI) also played to win last week. The leading video game maker delivered non-GAAP earnings that soared 58% to $0.49 a share. The pros were perched on the $0.44-a-share mark.

Activision Blizzard is a beacon of hope in a battered industry. Retailer GameStop (NYSE:GME) hit a fresh 52-week low last week, and most of the video game developers not named Activision Blizzard are struggling.

Finally, we have Hasbro (NYSE:HAS) having some fun. The toymaker's fourth-quarter profit catapulted 77% to $1.09 a share. Toy analysts must have been snoozing next to Chipotle watchers, as Wall Street was settling for earnings of $0.81 a share.

Pair up Hasbro's winning report with Mattel's (NYSE:MAT) blowout results a week earlier, and it was easy to get excited about smaller toymakers, too. Sure enough, LeapFrog Enterprises (NYSE:LF) went on to nearly double Mr. Market's target a couple of days later.

It's important to keep watching the companies that surpass 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.

Chipotle Mexican Grill is a Motley Fool Rule Breakers selection and a Motley Fool Hidden Gems choice. Activision Blizzard, GameStop, and Hasbro are Motley Fool Stock Advisor picks. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. The Fool owns shares of Activision Blizzard, Chipotle Mexican Grill, and Hasbro. 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 stocks in this column. 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.