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 pros over the past few trading days.
We can start with Seagate Technology (NAS: STX) . The hard drive maker's adjusted profit of $1.32 a share spun circles around the $1.08 a share that Wall Street was targeting. Then again, investors should have probably seen this coming. Rival Western Digital (NYS: WDC) had blasted through estimates a week earlier.
Shares of Green Mountain Coffee Roasters (NAS: GMCR) also percolated higher after delivering blowout quarterly results. Earnings soared 233% to $0.60 a share, nearly double the $0.36 a share that analysts were projecting.
The company behind the Keurig brewers was a popular short after hedge fund legend David Einhorn presented his bearish thesis on the company, but a strong holiday showing has reawakened interest in the stock.
Finally we have Cymer (NAS: CYMI) illuminating the worrywarts. The supplier of light sources to chip makers saw its quarterly profitability drop to $0.40 a share on the heels of a significant uptick in extreme ultraviolet R&D spending and a higher-than-expected effective tax rate. However, Mr. Market figured that Cymer would only earn half as much as it ultimately did in the period.
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 Western Digital.Motley Fool newsletter serviceshave recommended buying shares of Green Mountain Coffee Roasters.Motley Fool newsletter serviceshave recommended creating a lurking gator position in Green Mountain Coffee Roasters. 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, except for Green Mountain. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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