Don't settle for ordinary quarterly reports.
Every week, I take a look at three companies that beat market expectations, 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 Mosaic (NYS: MOS) making fertilizer out of Wall Street's estimates. The potash specialist delivered a quarterly profit of $1.40 a share, topping the $1.28 a share the pros were targeting.
But Mosaic's strong showing wasn't enough to escape an analyst downgrade. Citi prefers the faster growth and comparable valuation of CF Industries (NYS: CF) , making it the analyst's top pick in the fertilizer space at the expense of downgrading Mosaic.
Shares of Xyratex (NAS: XRTX) approached a 52-week high -- rising every trading day last week -- as the data storage company thumped Mr. Market's expectations. No one figured that Xyratex would come even close to the $0.69 a share that it rang up a year earlier, but it did.
Xyratex's fiscal-fourth-quarter profit of $0.73 a share was more than twice the $0.33 a share that Wall Street was forecasting.
Finally we have Landec (NAS: LNDC) parlaying polymer into a plumper profit. Landec's quarterly net income of $0.13 a share landed just ahead of the $0.12 a share the pros were banking on.
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.
At the time thisarticle was published The Motley Fool owns shares of CF Industries Holdings.Motley Fool newsletter serviceshave recommended buying shares of Landec. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure 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 the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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