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 (NYSE: PBY).

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 (Nasdaq: ORLY) and AutoZone (NYSE: AZO) hit all-time highs last week. They are the new all-weather stocks.

Upscale fitness apparel retailer lululemon athletica (Nasdaq: LULU) shows that there are signs of life at the other end of the spending spectrum. Folks may be saving money when it comes to fix their cars, but they're apparently not aghast at the notion of paying nearly $100 for a pair of stretchy yoga pants. Lululemon earned $0.26 a share, well ahead of both the $0.15 a share it rang up a year ago and the $0.23 a share that analysts were expecting.

Investors should be used to this by now, since the boutique operator has been running past the pros for several quarters now.





Q3 2010




Q4 2010












Source: Yahoo! Finance.

Finally, we have Conn's (Nasdaq: CONN) cleaning up nicely. The consumer electronics retailer overcame a 13.5% drop in sales during its latest quarter to post a profit of $0.17 a share. Mr. Market would've settled for net income of $0.11 a share. Larger rival Best Buy (NYSE: BBY) reports tomorrow, but it's not likely to be as lucky. Conn's specializes in heavier merchandise -- appliances, mattresses, and furniture -- that can't be delivered digitally or successfully sold online by nimbler players the way most of Best Buy's wares can.

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:

The Motley Fool owns shares of lululemon athletica and Best Buy. Motley Fool newsletter services have recommended buying shares of lululemon athletica. 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. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.