Why settle for ordinary quarterly reports?
I believe that the biggest factor in a stock's ability to
beat the market is its ability to beat the market's
expectations. That's why I look every week at three
companies that have humbled Wall Street's pros over the past
few trading days. If a company has more in the tank than the
analysts figured, capital appreciation often follows.
We can start with
Research In Motion (Nasdaq: RIMM). The
BlackBerry maker saw its quarterly profits
soar by 59%to $1.10 a share, as the company added 4.4
million net new subscribers and shipped a record 10 million
BlackBerry devices. Analysts were banking on a profit of only
$1.04 a share. The report came on the same day in which
smaller smartphone rival
Palm (Nasdaq: PALM) missed the market's
bottom-line target.
Investors also dug
Joy Global (Nasdaq: JOYG). The
mining specialistposted net income of $1.20 a share in
its fiscal fourth quarter, ahead of both the $1.11 it earned
a year ago and the $1.01 Wall Street was expecting.
Finally, we have
Best Buy (NYSE: BBY) rocking on the retail
front. The consumer-electronics chain earned
$0.53 a sharefor its fiscal third quarter. The pros were
perched at the $0.43 mark.
Best Buy spooked investors by pointing out how the holiday
quarter was checking in with lower gross margins, but it
still operates in a compelling retailing niche. Now that
Circuit City is gone, Best Buy,
Conn's (Nasdaq: CONN), and even
RadioShack (NYSE: RSH) stand to gain some
market share over the holidays.
Keep watching the companies that surpass expectations.
Over time, doing so will be a rewarding experience for
investors, as the market rewards the overachievers. That's
the kind of surprise we look for in the
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Either way, come back next Monday to learn about more
stocks that blew the market away.
This article was originally published as
3 Stocks That Blew the Market Awayon
Fool.com
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reserved.
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