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 Pep Boys
The auto aftermarket service and retail chain saw earnings climb 31% -- to $0.26 a share -- despite a 2% slide in comparable-store sales. Back out a series of one-time hits and a state tax valuation allowance gain, and profitability of $0.21 a share still bested the $0.19 a share Wall Street was targeting.
Top-line sluggishness notwithstanding, Manny, Moe, and Jack are in good company. Folks are trying to make their cars last longer in this iffy economy, which means maintaining their vehicles in a cheaper way than simply pulling up into the showroom dealer's service center. It's not a surprise to see auto parts retailers O'Reilly Automotive
Upscale fitness apparel retailer lululemon athletica
Investors should be used to this by now, since the boutique operator has been running past the pros for several quarters now.
|
EPS |
Est. |
Diff. |
---|---|---|---|
Q3 2010 |
$0.18 |
$0.13 |
39% |
Q4 2010 |
$0.32 |
$0.29 |
10% |
Q12011 |
$0.22 |
$0.19 |
16% |
Q12011 |
$0.26 |
$0.23 |
13% |
Source: Yahoo! Finance.
Finally, we have Conn's
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.
If you want to track these stocks to see if they come out ahead next quarter, add them to My Watchlist:
- Add Pep Boys to My Watchlist.
- Add Lululemon Athletica to My Watchlist.
- Add Conn's to My Watchlist.