Rocket Stocks for the Week

These stocks, including J. Crew and Kroger, could surge higher in coming days.

By Jonas Elmerraji , Mar 8, 2010 8:31 AM EST

BALTIMORE (Stockpickr) -- Despite clouds forming over the markets ahead of March's first trading day last Monday, U.S. stocks managed to battle through one of their strongest weeks in recent memory -- and the S&P 500 index jumped 3.1% as investors absorbed decent jobs numbers on Friday.

But as strong as the S&P's performance was last week, our Rocket Stocks managed to fare better once again.

Rocket Stocks, our weekly list of beaten-down stocks with near-term growth catalysts and long-term growth potential, seek to separate the cream from the investing crop. In the last five trading days, our five Rocket Stock picks have delivered 3.42% gains, bringing our performance over the S&P in the trailing 33 weeks to a staggering 45.98%. That means that since last July, investing in our weekly list at each Monday's open and selling at the following Friday's close would have yielded 67.07% gains to date.

And although performance like that is difficult to replicate, that's exactly what we're doing again this week with a fresh set of stocks. Here's a look at

this week's list

Niche beer brewer

Boston Beer Company

(SAM) - Get Report

could have a nice week in store as it battles hard against the big names in the highly competitive beer space. In an industry where the top three companies absolutely dominate, craft brewers have traditionally struggled to get their products on store shelves. But while the big three domestic beer brewers sell most of the beer volume in the U.S., craft brewers have been enjoying the most growth in recent years. Only Boston Beer is positioned to capitalize on both trends right now.

That's because as the nation's biggest craft brewer, the company has the scale and dollar power to fuel expensive nationwide ad campaigns while still appealing to an increasingly sophisticated beer palate. The company primarily sells beer under its Sam Adams brand name and also markets malt beverages and ciders under the Twisted Tea and HardCore Cider brands. That growth outside of the beer category exemplifies the growth strategy the company has undertaken in recent years: tapping multiple markets at once.

Craft beer companies face significant challenges in getting their products to market. Under the current "three-tier" alcohol distribution system that's been in place in the U.S. since the end of prohibition, the deck is skewed in favor of bigger names. But because the Sam Adams brand has become so nationally recognized, its demand essentially clears it of many of those hurdles. Watch the company's earnings release on Tuesday.

Another pre-earnings play this week is

Kroger

(KR) - Get Report

, America's largest supermarket chain. Although the grocery industry is characterized by difficult competition and relatively thin margins, the recession resistance of consumer necessities and advantages of certain companies over others present an attractive buying opportunity nonetheless.

With a massive network of stores, a growing number of fuel centers, and aggressive cost-cutting philosophy at its disposal Kroger should continue to perform well even in this economy. But the biggest factor in Kroger's favor could well be its private label program, which provides the company with higher-margin offerings for consumers all while maintaining control of the entire production and distribution cycle. An increased focus on private-label products will be key for bottom-line growth in 2010.

With earnings slated for Tuesday, shares of Kroger will certainly be worth keeping an eye on. Amid sliding expectations for consumer stocks, an earnings surprise could trigger a breakout in shares.

Upscale apparel retailer

J. Crew Group

( JCG) has been on a roller coaster ride for the past 18 months. As consumers lost their appetite for high-priced clothing in 2008, shares of the company tumbled along with sales numbers. But since 2009, J. Crew has seen a remarkable recovery, with shares up 236% since last January.

And as shoppers feel courageous enough to part with discretionary income in favor of a fuller closet, shares should continue to rise. We'll find out whether consumers have been spending on March 9, when the company announces its quarterly numbers.

For more stocks that made this week's cut, including

PetroChina

(PTR) - Get Report

and

Health Care REIT

(HCN)

, check out the

Rocket Stocks portfolio

at Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

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