The Top 10 Rocket Stocks for This Week

Last week I didn't get any hate mail regarding my picks for that week's Rocket Stocks portfolio.

For one, I didn't recommend Dendreon(DNDN Quote - Cramer on DNDN - Stock Picks), which ended the week flat in part because of a new probe by the Securities and Exchange Commission. If the biotech stock were to dip below $7 due to irrational behavior related to this investigation, I would definitely dip my feet back in and risk the wrath of FoDS (friends of the Dendreon shorts) again. For now, however, I'll steer clear.

This week's Top 10 Rocket Stocks portfolio focuses on stocks that I believe could run up into their earnings call or that, I believe, will provide some sort of upside surprise in their earnings report.

With just a few weeks left in TheStreet.com's Beat the Street 2.0 stock-picking contest, it's time to get serious about locking in gains and taking your portfolio over the finish line, or going for the kill if you are a bit behind.

First up is PF Chang's China Bistro(PFCB Quote - Cramer on PFCB - Stock Picks), a restaurant stock that's also featured in Who Should Darden Buy, a Stockpickr list of companies that would make sense for Darden(DRI Quote - Cramer on DRI - Stock Picks) to acquire.

With PF Chang's trading for just eight times operating cash flows and solid growth prospects for both its Bistro and Pei Wei concepts, PF Chang's stock is very cheap, offering a reasonable takeover target. With 261 restaurants, PF Chang's is still in the early stages of a regional-to-national spread of its franchises. Add into the equation the early successes of its development-stage franchises, Pei Wei and Taneko, and everything is in place for a strong growth stock, but at value prices.

As mentioned, PF Chang's trades at eight times cash flows, which is cheaper than its comparables, particularly Cheesecake Factory(CAKE Quote - Cramer on CAKE - Stock Picks) at 12.7 times cash flows and Darden at 9.4 times cash flows. If you were to give PF Chang's a Cheesecake Factory multiple, its shares would be at $52. PF Chang's closed Friday at $36.58.

The company reports earnings July 25. It has met or beaten expectations for the past four quarters. With a short ratio of 15.2, it would take short-sellers 15 days to cover their short positions, assuming there's no other buyers in the stock. So on any good news, the stock could really climb.

To watch Gregg Greenberg's video take of this column, click here.

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