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Tickers in this Article: HAS, BMRN, CAG, ATVI, MA, V, MSFT, GOOG
Stocks that are able to put together strings of positive earnings surprises are usually rewarded handsomely in the market. Buying into a stock after a few surprises and then riding out some more can work out very well.

Two great examples of this are Microsoft (Nasdaq:MSFT) and Google (Nasdaq:GOOG). Microsoft's early earnings surprises were one of the key indicators to buy the stock and experience massive gains. Similarly Google put together a string of earnings surprises following its IPO in 2004. Buying in then would have brought big gains. Take a look at these five stocks that have earnings surprises in their most recent quarter and are being rewarded for it. (Consensus estimates can send stocks spiraling - but do they represent reality? To learn more, read Surprising Earnings Results .)

Company
EPS Beat Previous Quarter*
Hasbro
(NYSE:HAS)
67%
Biomarin
(Nasdaq:BMRN)
150%
Conagra Foods
(NYSE:CAG)
54%
Activision
(Nasdaq:ATVI)
250%
MasterCard
(NYSE:MA)
30%
*From most recent quarter reported.

These are all stocks that have seen share gains in the last three months; however, earnings surprises are not the only thing to look for. If the market drags a stock through the mud, even though it had an earnings surprise, there are other factors at play, such as poor revenues.

Surprising Share Gains
Biomarin is in the biotech sector and is a great example how growth industries like biotech don't need a good economy to grow. Biotech stocks also carry higher risk then more stable companies, but through the rough market of the last year Biomarin has been performing very well.

Conagra is in a sector you might not expect to be represented on this list. The food industry has been squeezed by rising input costs, but Conagra has been able to perform well with solid cost management. Mastercard is a prime example of a company that has been able to string together earnings surprises. Over the last three months Mastercard stockholders have watched their shares gain 40%, while the market has dropped. Mastercard is in a great position, and investors may want to keep an eye on competitor Visa (NYSE:V), too.

Keep The Surprises Coming
Stocks that report robust earnings growth can still see big declines in price if the earnings per share miss by even a penny. Likewise, a penny in the other direction can be a huge boost to a company's stock price. The key is to watch for companies that manipulate earnings in order to report those extra few pennies. (To do your own sleuthing, check out Common Clues Of Financial Statement Manipulation.)

Earnings surprises are great for current shareholders, but can also be a great way to find stocks to add to your portfolio. It's a good sign when a company can consistently beat earnings estimates, and in most cases it is a sure indication that the stock price will rise. Buying in and experiencing surprises can boost your portfolio as well. Remember to examine the entire quarter to see if the company is truly doing better than expected, and if the prosperity is sustainable.

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