The fourth quarter earnings season has just begun. Some companies manage to consistently surprise the market with positive earnings reports. If you believe that company characteristics can allow EPS surprises to persist across reporting seasons, you may be very interested in this list. Test out your investing ideas with a free practice portfolio on Kapitall. We ran an analysis of stocks in the biotech industry for those that have demonstrated this persistence in EPS surprises, with a significant average of positive EPS surprises over the last four quarters. Do you think these companies will surprise us once more? Use this list as a starting-off point for your own analysis. List sorted by average earnings surprise. List Average 1-Year Return: 49%. 1. Regeneron Pharmaceuticals, Inc. (REGN): Develops, and commercializes pharmaceutical products for the treatment of serious medical conditions in the United States. Market cap at $17.71B, most recent closing price at $183.40.In Dec 2011: Reported EPS at -0.54 vs. estimate at -0.6 (surprise of 10%). In Mar 2012: Reported EPS at 0.11 vs. estimate at -0.23 (surprise of 147.8%). In Jun 2012: Reported EPS at 0.7 vs. estimate at 0.27 (surprise of 159.3%). In Sep 2012: Reported 1.72 vs. estimate at 0.95 (surprise of 81.1%. [Average earnings surprise at 99.55%]. 2. Optimer Pharmaceuticals, Inc. (OPTR,): Focuses on discovering, developing, and commercializing hospital specialty products worldwide. Market cap at $498.84M, most recent closing price at $10.46.In Dec 2011: Reported EPS at 0.28 vs. estimate at 0.11 (surprise of 154.5%). In Mar 2012: Reported EPS at -0.23 vs. estimate at -0.38 (surprise of 39.5%). In Jun 2012: Reported EPS at -0.01 vs. estimate at -0.06 (surprise of 83.3%). In Sep 2012: Reported -0.56 vs. estimate at -0.64 (surprise of 12.5%. [Average earnings surprise at 72.45%].
3. Targacept, Inc. (TRGT): Engages in the design, discovery, and development of novel Neuronal Nicotinic Receptors (NNR) Therapeutics for the treatment of diseases and disorders of the central nervous system. Market cap at $160.99M, most recent closing price at $4.79.In Dec 2011: Reported EPS at -0.29 vs. estimate at -0.3 (surprise of 3.3%). In Mar 2012: Reported EPS at 0.07 vs. estimate at -0.25 (surprise of 128%). In Jun 2012: Reported EPS at 0.43 vs. estimate at 0.4 (surprise of 7.5%). In Sep 2012: Reported -0.24 vs. estimate at -0.41 (surprise of 41.5%. [Average earnings surprise at 45.07%].
4. Osiris Therapeutics, Inc. (OSIR): Focuses on the development and marketing of therapeutic products to treat various medical conditions in the inflammatory, autoimmune, orthopedic, and cardiovascular areas. Market cap at $297.89M, most recent closing price at $9.06.In Dec 2011: Reported EPS at 0.15 vs. estimate at 0.11 (surprise of 36.4%). In Mar 2012: Reported EPS at -0.04 vs. estimate at -0.09 (surprise of 55.6%). In Jun 2012: Reported EPS at -0.13 vs. estimate at -0.15 (surprise of 13.3%). In Sep 2012: Reported -0.09 vs. estimate at -0.14 (surprise of 35.7%. [Average earnings surprise at 35.25%]. 5. Array BioPharma, Inc. (ARRY): Focuses on the discovery, development, and commercialization of small molecule drugs to treat patients afflicted with cancer and inflammatory diseases in North America, Europe, and the Asia Pacific. Market cap at $489.99M, most recent closing price at $4.34.In Dec 2011: Reported EPS at -0.06 vs. estimate at -0.12 (surprise of 50%). In Mar 2012: Reported EPS at -0.11 vs. estimate at -0.16 (surprise of 31.2%). In Jun 2012: Reported EPS at -0.09 vs. estimate at -0.13 (surprise of 30.8%). In Sep 2012: Reported -0.13 vs. estimate at -0.15 (surprise of 13.3%. [Average earnings surprise at 31.33%]. 6. YM BioSciences Inc. (YMI: Engages in the licensing and commercialization of drug products and technologies primarily for the treatment of cancer or cancer-related conditions worldwide. Market cap at $455.32M, most recent closing price at $2.89.In Dec 2011: Reported EPS at -0.06 vs. estimate at -0.07 (surprise of 14.3%). In Mar 2012: Reported EPS at -0.05 vs. estimate at -0.07 (surprise of 28.6%). In Jun 2012: Reported EPS at -0.04 vs. estimate at -0.06 (surprise of 33.3%). In Sep 2012: Reported -0.05 vs. estimate at -0.07 (surprise of 28.6%. [Average earnings surprise at 26.2%].7. Alexion Pharmaceuticals, Inc. (ALXN): Engages in the discovery, development, and commercialization of biologic therapeutic products in the United States, Europe, Latin America, Japan, and the Asia Pacific. Market cap at $19.49B, most recent closing price at $100.31.In Dec 2011: Reported EPS at 0.41 vs. estimate at 0.34 (surprise of 20.6%). In Mar 2012: Reported EPS at 0.45 vs. estimate at 0.39 (surprise of 15.4%). In Jun 2012: Reported EPS at 0.47 vs. estimate at 0.37 (surprise of 27%). In Sep 2012: Reported 0.6 vs. estimate at 0.47 (surprise of 27.7%. [Average earnings surprise at 22.68%].
8. Questcor Pharmaceuticals, Inc. (QCOR): Provides prescription drugs for central nervous system and inflammatory disorders. Market cap at $1.55B, most recent closing price at $26.47.In Dec 2011: Reported EPS at 0.47 vs. estimate at 0.42 (surprise of 11.9%). In Mar 2012: Reported EPS at 0.61 vs. estimate at 0.52 (surprise of 17.3%). In Jun 2012: Reported EPS at 0.69 vs. estimate at 0.64 (surprise of 7.8%). In Sep 2012: Reported 0.97 vs. estimate at 0.77 (surprise of 26%. [Average earnings surprise at 15.75%]. 9. Charles River Laboratories International, Inc. (CRL): Provides research models and laboratory animal support expertise to help its global partners advance their research and drug development efforts. Market cap at $1.94B, most recent closing price at $39.91.In Dec 2011: Reported EPS at 0.69 vs. estimate at 0.56 (surprise of 23.2%). In Mar 2012: Reported EPS at 0.7 vs. estimate at 0.65 (surprise of 7.7%). In Jun 2012: Reported EPS at 0.75 vs. estimate at 0.66 (surprise of 13.6%). In Sep 2012: Reported 0.65 vs. estimate at 0.62 (surprise of 4.8%. [Average earnings surprise at 12.32%]. 10. Illumina Inc. (ILMN): Develops, manufactures, and markets integrated systems for the analysis of genetic variation and biological function. Market cap at $6.48B, most recent closing price at $52.53.In Dec 2011: Reported EPS at 0.35 vs. estimate at 0.31 (surprise of 12.9%). In Mar 2012: Reported EPS at 0.36 vs. estimate at 0.33 (surprise of 9.1%). In Jun 2012: Reported EPS at 0.4 vs. estimate at 0.37 (surprise of 8.1%). In Sep 2012: Reported 0.41 vs. estimate at 0.39 (surprise of 5.1%. [Average earnings surprise at 8.8%]. ( List compiled by Rebecca Lipman)