Why settle for ordinary quarterly reports?
I believe that the biggest factor in a stock's ability to beat the market is to beat the market's expectations. That's why I look every week at three companies that have humbled Wall Street's pros. If a company has more in the tank than the analysts figured, capital appreciation often follows.
We can start with Netflix (Nasdaq: NFLX). The flick lender posted a quarterly profit of $0.54 a share. Analysts were settling for net income of $0.50 a share, ahead of the $0.42 a share it earned a year ago.
Surprised? You shouldn't be. Netflix has now clocked in ahead of Mr. Market in 18 of the past 20 quarters.
Apple (Nasdaq: AAPL) is another topper. In earning $1.35 a share in its latest quarter, the Mac daddy barreled past Wall Street's target of $1.17 a share. Even if there's room for Research In Motion (Nasdaq: RIMM) and Palm (Nasdaq: PALM) to succeed in the smartphone market, Apple once again showed its strength by selling a ton of iPhones.
Finally, we have Hasbro (NYSE: HAS) playing with the pros. The toymaker delivered a profit of $0.26 a share, or $0.32 before the dilution related to a cable-TV-channel deal. Analysts figured the company behind Transformers and Mr. Potato Head would come through with only $0.23 a share on the bottom line. It's been a good month overall for toymakers, as Hasbro and Mattel (NYSE: MAT) have now both landed ahead of Wall Street.
So keep watching the companies that surpass expectations. As the market rewards the overachievers, we in the Rule Breakers newsletter service pay attention. 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.
Copyright 2009 by United Press International.