3 Stocks That Blew the Market Away

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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 Zumiez (NAS: ZUMZ) . The extreme sports apparel retailer posted a quarterly profit of $0.45 a share, ahead of the $0.42 a share Wall Street was expecting. Unlike lululemon athletica (NAS: LULU) -- the upscale yoga gear specialist that also beat on the bottom line but offered up a holiday outlook that fell on the low end of analyst projections -- Zumiez raised its guidance.

Hillenbrand (NYS: HI) also held up nicely in last week's earnings report. Then again, given Hillenbrand's funeral products specialty, maybe we should call this an urn-ings report. Adjusted net income climbed 20% to $0.48 a share, obliterating the $0.37 a share that was originally forecasted.

Finally, we have OmniVision (NAS: OVTI) with a mixed showing. Yes, the leading maker of image sensors earned $0.38 a share in its latest quarter. Folks figured that OmniVision would only ring up a profit of $0.32 a share. However, the company's unsettling guidance calling for sharp sequential dips in revenue and profitability was enough to scare away potential buyers.

OmniVision, Lululemon, and even jewelry retailerTiffany (NYS: TIF) saw their shares get whacked last week after following up blowout bottom-line results with uninspiring glimpses of the holiday quarter. Strong results and a healthy outlook go hand in hand in truly beating the market.

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:

At the time this article was published The Motley Fool owns shares of lululemon athletica and Hillenbrand. Motley Fool newsletter services have recommended buying shares of Lululemon and Hillenbrand. 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 theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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