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Top Rocket Stocks for Week of March 24

James Altucher

With so much liquidity hitting this market coupled with the fact that stocks in general are cheap, an inevitable snapback rally happened.

Since the start of the Rocket Stocks column, I've each week compiled a list of stocks that I believe have the catalysts to send them soaring in the coming days.

But before we get to this week's Rocket Stocks portfolio, let's take a look at how last week's picks fared.

• Goldman Sachs GS: Up 26.5% on the week after beating analysts' earnings estimates Tuesday.
• Level 3 Communications LVLT: Up 8.1% on the week as a pure snapback play.
• Tesoro TSO: Up 3.7% on the week.
• UltraShort Oil & Gas ProShares DUG: Up 3.4% as oil fell 6% on the week.
• Gilead GLD: Up 2.1% on the week.
• Enzon Pharmaceuticals ENZN: Up 2% on the week.
• Aluminum Corp. of China ACH: Up 0.5% on the week after reporting lower-than-expected earnings Tuesday.
• Hollywood Media HOLL: Down 0.8% on the week.
• Market Vectors Global Agribusiness ETF MOO: Down 3.4% as agricultural stocks lagged the overall market this week.
• Southern Union SUG: Down 4.3% on the week as natural gas prices fell.

Now let's look at some of the picks from this week's Rocket Stocks.

First up this week is Robbins & Myers RBN, a diversified machinery and oil pumping company that is set to report fiscal second-quarter earnings on Thursday.

Robbins & Myers is divided into two main business platforms:

1. Fluid Management supplies Robbins & Myers with a substantial part of its total revenue. Fluid management, especially its pressure pumping systems, is essential in keeping oil rigs squeaky clean, allowing them to pump as much oil as they physically can. With oil at record prices, it's only natural to assume this part of the business is booming.
2. Process Solutions deals with the chemical and pharmaceutical sectors. Its Romaco division, which has been very volatile in the past, saw large orders at the beginning of the first quarter. Most analysts have yet to add Romaco's earnings potential into their overall estimates. Once they see a second quarter of steady growth and orders in Romaco, analysts are likely to boost their estimates.

While weaker industrial goods orders may slow down some of its domestic sales, 60% of the Robbins & Myers' total revenue comes from outside the U.S, making this slowdown hardly an issue. Also, the dollar is 12% weaker since the company last reported earnings.

Adjusted EBIT margins went from 7.4% to 13.1% from 2006 to 2007. Robbins & Myers has beaten earnings estimates six out of the last seven earnings reports, and last quarter the company raised its 2008 guidance by 25 cents a share.

Weekly Catalyst: With 60% of its revenue coming from overseas, Robbins & Myers is greatly aided by a positive currency conversion rate. Robbins & Myers is also an indirect play on rising oil with most of its end-market customers' business based on $40-a-barrel oil. With oil trading at 2.5 times that level, the company could deliver a huge beat.

One other fact to note is that there's a massive 18% short position on Robbins & Myers shares. That large short position gives the stock an even greater potential of moving much higher on an earnings upside surprise.

For more detailed analysis and the rest of this week's picks, including National Oilwell Varco NOV, Verizon VZ and Baidu BIDU, check out the Rocket Stocks for the Week of March 24-28.

As always, to find the snapbacks and potential breakouts on a regular basis, check out these Stockpickr portfolios, which I use in my own research each week:

• Today's Hot List: This daily list is a must-view every midday to see what stocks are making the biggest moves and why.
• Always check the Biggest Percentage Losers, a list of stocks that lost big the day before, because they can snap back hard.

  When you check this list on Stockpickr, you can see which stocks are owned by the quality hedge funds and mutual funds. Pay attention to those. They will be buying at the lower prices, so you should be also.

• Ditto for the 52-week-low list. You must check the above two lists every day if you hope to find volatile stocks.
• Biotech Short Squeezes: Dendreon DNDN and others can often be found in this category.
• Stocks Rising on Unusual Volume: These are potential breakout stocks.
• Stockpickr's System Trades of the Day: These are trades triggering that day in various back tested trading systems we've developed.
• Stocks With Unusual Option Activity: Perhaps someone knows something?
• Latest Activist Situations: These are beaten-down stocks that hedge funds are accumulating shares of and demanding change in. Believe me, these hedge funds piggyback each other. And once they start rocking the boat, things happen quickly. This should be on your must-view list.

One final place to frequent is the Answers section on Stockpickr, where ideas such as those presented in this article are thrown around daily.