Rocket Stocks for the Week

These stocks, including CSX, could surge higher in coming days.
By Jonas Elmerraji ,

BALTIMORE (Stockpickr) -- The Dow finished a stone's throw from 11,000 on Friday, a number that could be surpassed in this week's trading thanks to news that the EU is finally bailing out Greece. The idea that other EU members would pony up cash for Greece comes as little surprise to most of Wall Street, but with the end result still up in the air until now, this move should finally let investors breathe a sigh of relief. While the deal still has yet to be unanimously approved, according to The Wall Street Journal, the financials were released to the public to calm the financial markets.

The other big news item this week is earnings season. Companies start reporting their numbers to investors en masse this week, providing stocks with another fundamental catalyst for a move.

As usual, we're turning to

Rocket Stocks

to milk the most out of the market's ebb and flow this week. For the uninitiated, Rocket Stocks are our weekly list of beaten-down stocks with near-term growth catalysts and long-term growth potential. They certainly live up to their name - in the past 38 weeks, our list of intraweek plays has outperformed the S&P 500 index by 46.64%.

Here's a look at

this week's list

.

Investors who took a stake in rail giant

CSX

(CSX) - Get Report

have been well-rewarded in the last year, with shares of the company up more than 78% in the trailing 12 months. But the company could deliver even more substantial gains this week thanks to an earnings release slated for April 13. If CSX manages to continue its trend of operational improvements, expect shares to take off as a result.

Operations have been the name of the game for CSX in the last few years. With relatively stable demand, streamlining costs has proved to be the path to thicker margins and

more-sizable dividend payouts

. The company has taken an egalitarian approach to cutting costs, chopping high-paying management jobs as well as train performance numbers. It's a strategy that's paid off as CSX improved its net margins to more than 13% in the last quarter.

>> Who Owns CSX?: Bill and Melinda Gates

Analysts are hoping for earnings of 68 cents per share on Tuesday, a number that's reasonable given the company's fourth-quarter performance back in January. We're betting on this stock to be "on track" for the week.

Another Rocket Stock play that's slated to announce its quarterly earnings this week is $38 billion Korean steel giant

Posco

(PKX) - Get Report

, which releases its numbers today. While commodity-driven stocks typically make poor intraweek plays, Posco benefits from exceptionally high margins, a phenomenal balance sheet, and -- most important -- economic tailwinds.

Those tailwinds could lead to higher utilization rates in 2010, something that Posco needs to maintain its double-digit profitability in the face of stiff competition in the Asian steel market. Less in doubt is the company's foothold on Korean steel, which should provide good income insulation for Posco given an uptick in heavy industry manufacturing there. The number-one factor for this company continues to be steel prices, which have left many steel makers short of Wall Street's expectations in recent quarters. But regardless of where steel prices push Posco, the special circumstances in this stock make it worth watching this week.

In the largely price-driven discount brokerage market, San Francisco-based

Schwab

(SCHW) - Get Report

is faring well in 2010. While shares have more or less paced the market year-to-date, what's more significant is the uptick in customer satisfaction that the company has been seeing this year. That change should translate into higher transaction and asset management fees for Schwab's top line numbers.

Schwab has been breaking new ground in the brokerage business, eschewing traditional transaction-based revenues (like commissions) in favor of recurring management fees in its line of mutual funds and ETFs. While many firms subsidized management fees for their mutual fund offerings, Schwab surprised the industry this year when it announced that its brokerage customers could buy its line of ETFs without paying commissions either - for now. Pricing structures woven into the funds' prospectuses could incentivize keeping money with Schwab's funds, which in turn will put fees in Schwab's pocket.

>> Who Owns Schwab?: Blue Ridge Capital

An upcoming earnings release could be the catalyst that pushes shares higher this week.

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

Mirant Corporation

( MIR) and

Westar Energy

(WR)

, check out the

Rocket Stocks portfolio

at Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>This Week's "Barron's" Roundup

>>Dividend-Boosting Stocks

>>Jim Cramer's Portfolios of the Week

Follow Stockpickr on

Twitter

and become a fan on

Facebook.

Jonas Elmerraji is the editor and portfolio manager of the

Rhino Stock Report

, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including

Forbes

and

Investopedia

, and has been featured in

Investor's Business Daily

, in

Consumer's Digest

and on

MSNBC.com

.

Loading ...