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 pros over the past few trading days.
We can start with Baidu (NAS: BIDU) .
China's leading search engine saw its second-quarter profit soar 70% to $1.24 a share. Analysts were only expecting net income of $1.12 a share.
Now, it's true that Baidu benefited from the reversal of a tax provision that lowered the dot-com darling's effective tax rate to 7.9%. If Baidu would've faced the prior year's second quarter tax rate of 14.9% profitability would have been right at where the pros were perched. However, it's hard to deny that Baidu didn't have a strong quarter when pre-tax profits still rose by a sharp 56%.
Akamai (NAS: AKAM) was another winner. The top content-delivery network checked in with an adjusted quarterly profit of $0.43 a share, well ahead of the $0.37 a share that analysts were forecasting. The report bodes well for smaller rival Limelight Networks (NAS: LLNW) , which checks in on Thursday.
Finally, we have iRobot (NAS: IRBT) outsmarting the humans. It's something that the company behind the Roomba vacuum-cleaning orb and the PackBot military robot has been doing for ages. iRobot has beaten Wall Street estimates -- by at least double-digit percentage margins -- for 12 consecutive quarters.
Last week was a big one, though. Analysts were betting on quarterly earnings of $0.09 a share, but iRobot nearly tripled that sum with a profit of $0.26 a share.
Moving in the right direction
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.
The article 3 Stocks That Blew the Market Away originally appeared on Fool.com.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.The Motley Fool owns shares of Baidu.com. Motley Fool newsletter services have recommended buying shares of iRobot and Baidu.com. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.