Don't 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 stunned expressions 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 Finisar
Finisar's fundamentals continue to brighten. Three months ago, Wall Street figured that Finisar would earn $1.00 a share this fiscal year, and $1.22 a share next year. Now the pros are perched on $1.51 a share in profitability for fiscal 2011, and $1.83 a share next year. How can Finisar be trading at only 13 times next year's bottom-line estimate?
We also have Sigma Designs
If you had any doubts, check back with Netflix's
Finally we have Collective Brands
Although they say everybody loves a bargain, it's not universal. Big Lots
It's important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That's the kind of surprise that 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.
Sigma Designs is a Motley Fool Rule Breakers pick. Netflix is a Motley Fool Stock Advisor recommendation. Sigma Designs is a Motley Fool selection. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the stocks in this column, except for Netflix. 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.