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 Cisco Systems (NAS: CSCO) .
The networking gear giant earned $0.40 a share on an adjusted basis in its latest quarter. Sure, this was less than the $0.43 a share that Cisco earned a year earlier, but Wall Street was bracing itself for a profit of only $0.38 a share.
Cisco has managed to surpass Wall Street expectations for 14 consecutive quarters, but this is largely the result of pessimistic analysts lowering their profit targets as we approach Cisco's quarterly conference calls. The company still has its challenges selling switches and routers in this competitive climate.
Universal Display (NAS: PANL) also illuminated the market with its report. The market was banking on a quarterly deficit of $0.07 a share -- already an improvement over the $0.12 a share loss it mustered a year earlier -- but the OLED pioneer came through with a rare quarterly profit on a nondiluted basis.
Then there's Cree (NAS: CREE) . The maker of LED lighting materials posted an adjusted profit of $0.28 a share in its fiscal fourth quarter. Profitability was nearly cut in half, but the pros were banking on a slightly smaller profit.
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.
At the time thisarticle was published The Fool owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Universal Display and Cisco Systems. 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 is a fan of toppers. He does not own shares in any of the stocks in this column. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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