3 Stocks That Blew the Market Away


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 Focus Media (NAS: FMCN) .

The real world advertiser watches over one of the largest fleets of LCD monitors, poster frames, and billboards spewing marketing messages throughout China. It's now been a couple of years since a deal to sell most of its businesses to Sina (NAS: SINA) fell through, but Focus Media is making the most of its second chance. Adjusted earnings in its latest quarter clocked in at $0.44 a share, well ahead of both the $0.30 a share it earned a year earlier and the $0.37 a share that analysts were expecting.

Pandora (NYS: P) also bested the pros. The fast-growing leader in streaming music surprised Wall Street with an adjusted quarterly profit of $0.02 a share. Wall Street was braced for a small deficit.

Broadcasters of audio content may not seem like a scintillating industry, but Pandora joins Sirius XM Radio (NAS: SIRI) in landing comfortably ahead of analysts this month.

Then there's Krispy Kreme Doughnuts (NYS: KKD) . Analysts may have seemed ambitious in targeting quarterly profitability to double from the $0.03 a share it posted a year earlier. I guess Wall Street missed the "Hot Doughnuts Now" sign in blazing neon. Krispy Kreme's net income actually quadrupled to $0.12 a share, sending the stock 9% higher on Friday.

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 thisarticle was published Motley Fool newsletter services have recommended buying shares of Sina. 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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