Every ten minutes I get an email about some stock that reported a great quarter and nothing happened. "I can't believe how fabulous
was and yet it's flat. What does the Street want?"
To which I say, hold it, take a look at
. I first heard of these guys in a great
piece called "Looking for the Next Cisco" by
. The firm makes digital loop management systems and apparently it really caught on this quarter. Revenue was twice what analysts were forecasting. (Remember
basically did the revenue.) Gross margins exceeded forecast by 15 percentage points. Management itself was blown away by these numbers. That's what the Street wants to see.
, which had given so-so guidance the previous quarter, yesterday reported a terrific number, igniting the whole group. This time it trounced the revenue estimates big-time and had substantially higher gross margins. These were truly surprising. When people talk about blowouts, these were blowouts.
So, don't blame the market. The market rewarded the true surprises as it always does.
So far though, there just haven't been enough true blowouts. When we get them, the stocks tell the truth. As always.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at