Why settle for ordinary quarterly reports?
I believe that the biggest factor in a stock's ability to
beat the market is its ability to beat the market's
expectations. That's why I look every week at three
companies that have humbled Wall Street's pros over the past
few trading days. If a company has more in the tank than the
analysts figured, capital appreciation often follows.
We can start with
Starbucks (Nasdaq: SBUX). The coffee giant
earned
$0.24 a sharebefore charges in its latest quarter, well
ahead of both the $0.10 it rang up a year ago and the $0.21
that analysts were expecting.
Things aren't perfect at Starbucks, though. Same-store
sales are still negative, and revenue fell again. However,
the healthy bottom line is a testament to the company's
cost-cutting strategies.
MasterCard (NYSE: MA) also charged past the
pros. The credit-card giant delivered a third-quarter profit
of
$3.45 a share, while Wall Street was swiping its plastic
at a $2.94 target. Investors should have seen this coming,
since rival
Visa (NYSE: V) also
surpassed analyst guesstimatesa week earlier.
Finally, we have
Sirius XM Radio (Nasdaq: SIRI) arriving at
near-profitability fashionably early. The satellite-radio
giant merely
broke evenbefore charges, but the market was braced for
yet another quarterly deficit.
So keep watching the companies that surpass expectations.
Over time, doing so will be a rewarding experience for
investors, as the market rewards the overachievers. That's
the kind of surprise we look for in the
Rule Breakers
newsletter service. Want in? Check out a
30-day trial subscription. And come on back next Monday
to learn about more stocks that blew the market away.
This article was originally published as
3 Stocks That Blew the Market Awayon
Fool.com
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