Don't 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 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 Select Comfort (Nasdaq: SCSS). Shares of the company behind the Sleep Number air-chambered mattresses gave its shareholders a peaceful night's sleep by earning $0.13 a share in its latest quarter. Select Number's bottom-line performance is well ahead of both the $0.08 a share it earned a year earlier and the $0.11 a share that analysts were targeting.

It was easy to see Select Comfort's strong performance coming. Rival Tempur-Pedic (NYSE: TPX) and home furnishings bellwether Bed Bath & Beyond (Nasdaq: BBBY) also landed ahead of the pros by double-digit percentage point margins in their most recent quarters.

Chipotle Mexican Grill (NYSE: CMG) is also chomping down the pros like a hungry patron eating one of the quick-service chain's signature burritos. Earnings per share soared 49% to $1.47 a share, fueled by a robust 12.6% spike in same-store sales for the quarter.

Analysts were banking on a mere $1.29 a share profit out of the burrito roller, but what else is new? Wall Street's been sorely underestimating Chipotle's earnings potential all year.





Q1 2010 $1.19 $0.95 25%
Q2 2010 $1.46 $1.39 5%
Q3 2010 $1.52 $1.31 16%
Q4 2010 $1.47 $1.29 14%

Source: Thomson Reuters.

Finally we have Whole Foods Market (Nasdaq: WFMI) checking out nicely. The organic grocer's quarterly net income of $0.51 a share was considerably better than the $0.46 a share that investors were expecting. Whole Foods' strong report also sent shares of rival upscale grocer The Fresh Market (NYSE: TFM) nicely higher last week.

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.

Chipotle and The Fresh Market are Motley Fool Rule Breakers selections. Bed Bath & Beyond and Whole Foods are Motley Fool Stock Advisor recommendations. The Fool owns shares of Chipotle, which is also a Motley Fool Hidden Gems 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. 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.