Rocket Stocks for the Week
BALTIMORE (Stockpickr) -- How much has your portfolio grown in the last year and a half? If you'd followed our weekly Rocket Stock plays for the last 82 weeks, you'd be sitting on gains of 107.68%, just by buying our list of five stocks at each Monday's open and selling by Friday's close. That performance outpaces the S&P 500's climb by a staggering 75.79%.
For the uninitiated, Rocket Stocks are our weekly list of companies with short-term gain catalysts and longer-term growth potential. This week, we'll continue our trend of looking at stocks with rising analyst expectations.
On Wall Street, expectations can mean everything -- and stocks with rising expectations often benefit from increased buying pressures from institutions and retail investors alike. To find them, I run a quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises.
Here's a look at
.
Metals have been on an absolute tear
in 2010 thanks to heavy buying among speculators and longer-term investors. If market angst has helped any asset class, it's been hard commodities, which investors typically flock to when stock volatility exceeds their comfort zones.
One of the big beneficiaries of that buying has been
Freeport-McMoRan Copper & Gold
(FCX) - Get Report
, the $53 billion
that ranks as the world's largest producer of copper and molybdenum and a major producer of gold.
Continued upside in copper prices has been paving the way to profits for Freeport, as prices for the metal have been driven higher by an uptick in demand. With Freeport behind more than 10% of worldwide mining capacity for the metal, it's clearly the lynchpin of the company's business. And because the company's mines have been around for decades -- with economics worked out to sustain profitability under much cheaper copper prices -- the extraction cost is minuscule at many of the company's productive mining sites.
The relative wealth added to Freeport's corporate coffers has been well used in the last several years. In the last two years, the firm has extinguished a large portion of its outstanding debt load. A continued rally in copper should be a reliable catalyst for capital appreciation in Freeport-McMoRan -- and don't forget about the company's
.
Meanwhile, a new stock has popped up on our weekly quantitative sentiment screens.
CBS
(CBS) - Get Report
is a household name, but in the last several years, most households would have done well to avoid the stock amid crumbling advertising costs and cutbacks in consumer entertainment spending. In 2010, however, this television network is on an upswing, with shares up more than 28% year-to-date and analysts expecting continued good news.
Since spinning off from
Viacom
(VIA) - Get Report
at the height of the equity boom of 2006, CBS has worked hard to diversify its interests in kind with its broadcast TV competitors. The media conglomerate currently owns large stakes in outdoor advertising, book publishing, pay TV and radio, but broadcast TV continues to be the major contributor to CBS's top-line numbers.
The biggest growth catalyst for CBS in the next few years won't be emergence into new businesses. It's much more likely to be a slow-but-steady rebound in the advertising market. Meanwhile, the company's more attractive assets (such as Showtime and its
properties) should continue to mature, but they're currently not a big enough chunk of the company's overall business to really shine for investors. Regardless, we're betting on shares this week on the heels of rising analyst sentiment.
SanDisk
(SNDK)
enjoyed a strong ending to last week, gaining more than 4% on
strong performance across the tech sector
.
The company, which develops and markets flash-based data storage products, looks to benefit from increasing storage demands in mobile devices. There's currently a scarcity element with flash memory, as OEMs try to get a hold of ample supplies for their next-generation devices; as a result, SanDisk should continue to see top-line growth as pricing stays strong.
While computers have traditionally used magnetic drives for storage, the improved portability of flash drives has made the latter an increasingly popular option for laptops and tablets, a phenomenon that's only increased demand for SanDisk's products. But the company doesn't actually need to produce anything to make money. With a robust intellectual property portfolio, patent royalties make up a material chunk of cheap revenue.
The tech sector is continuing to look strong ahead of Monday's market open, so we're betting on this stock to start the week.
For more stocks that made this week's cut, including
Rockwell Automation
(ROK) - Get Report
and
Hartford Financial
(HIG) - Get Report
, check out
at Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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At the time of publication, author had no positions in stocks mentioned.
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.