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 pros over the past few trading days.

We can start with Apple (NAS: AAPL) .

The world's most valuable tech company bounced back in a major way. Analysts had overestimated Apple's earnings power three months ago, but this time around it was Apple assuming its more natural position of blowing Wall Street's profit targets out of the water.

Apple earned $13.87 a share in its holiday quarter, ahead of both the $10.16 a share the pros were expecting and the $6.43 a share that it rang up a year earlier. Good things happen when you clear more than 37 million iPhones and 15.4 million iPads.

Netflix (NAS: NFLX) also bounced back with a redemptive quarter. The video service giant's profitability slipped 16% to $0.73 a share in the fourth quarter, but that blew past the $0.55 a share that nervous Wall Street pros were forecasting. Netflix may have lost millions of high-margin DVD-based subscribers during the period, but its streaming business is recovering nicely both here and abroad.

Finally, we have Caterpillar (NYS: CAT) inching higher. The maker of heavy industrial gear scored a profit of $2.32 a share in its fourth quarter, fueled by a healthy surge in Asia and steady performance closer to home. Investors figured that Caterpillar would only be good for net income of $1.73 a share.

The party doesn't end here for Caterpillar. It's aiming for ambitious earnings growth of 25% here in 2012.

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. If that's not up your alley just yet, you can still check out a free special report detailing the next trillion dollar revolution.

Either way, come back next week to learn about more stocks that blew the market away in the coming days.

If these three victors aren't enough, check out a new report that reveals three hidden winners in a booming niche that will only get bigger in the future. It's a free report, so check it out soon.

At the time this article was published The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and Netflix; and creating a bull call spread position in Apple. 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, except for Netflix. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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