BALTIMORE (Stockpickr) -- The MLK Jr. market holiday provided traders and investors with a reprieve from the day-to-day grind of watching the market -- a welcome opportunity to gain some perspective following the unbridled rally that's sent the S&P 500 up nearly 10% in the last quarter. A slowdown in trading is particularly important given that it's currently earnings season, the time of year when an overwhelming chunk of publicly traded company announce their quarterly performance numbers to Wall Street.
As usual, we're turning to our weekly Rocket Stocks list to eke out maximum performance out of the market.
For the uninitiated, Rocket Stocks are our weekly list of companies with short-term gain catalysts and longer-term growth potential. In the last 87 weeks, our Rocket Stocks have beaten the S&P 500 by 77.68%.
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
Changes have been afoot for a while at the offices of
, the tech firm best known for its line of consumer computers and printers. HP has been working hard to grow its footprint in the enterprise business, acquiring smaller IT firms that own promising technologies that can easily be implemented into HP's offerings.
The shift to the enterprise computing business is a good strategic move for the company, which has seen growth stifled of late at the hands of increased competition and crumbling margins in the PC business.
That said, some of the vestiges of HP's past will continue to be major contributors to revenues. Take the printer manufacturing group, for instance. Printers have long been a major business for HP, but their attractiveness mainly comes from the recurring costs of materials like ink, which continue to provide revenues to pad HP's coffers throughout the lives of their devices. While printing only contributes around 20% of sales right now, that number should continue to grow in the coming quarters.
While HP still wears the crown as the largest PC manufacturer, the consumer computer business has largely become commoditized and unappealing. With costs falling across the board for electronics -- computers included -- HP is likely to see falling margins going forward. Instead, investors should focus on the company's changing face for growth.
HP shows up in the portfolios of
, at 4% of the total portfolio, and
, at 0.5% of the total portfolio. According to Karvy Global, it's one of
, and it was included in a recent portfolio of
after insiders at HP dumped $10.2 million worth of stock. With a
, HP is one of TheStreet Ratings'
This isn't the first time
has made our weekly Rocket Stocks list -- secular tailwinds in the heavy equipment industry have been driving growth for this equipment giant for the last year. In the process, investors have been rewarded for their patience after the burst housing bubble, with shares up nearly 60% in the past 12 months.
Deere's enormous installed base is a major feather in its hat right now, as industrial and agricultural clients start considering new equipment once again. The company lays claim to nearly half of the North American agricultural equipment market, a business that's seen recovery take place in leaps and bounds as the prices of soft commodities rallied in recent months. For true growth opportunities, Deere is looking abroad to developing countries where Western agricultural technologies have yet to take hold in large part.
That focus outside of U.S. borders should give the company the growth that management's currently targeting, particularly given the increasing affluence of consumers in countries such as China and India. As consumer demand increases, so too should demand for heavy agricultural equipment.
Major holders of Deere include
, both of which initiated new positions in the stock in the most recent period.
recently included Deere in a discussion of
, and Karvy Global named it one of
. TheStreet Ratings has a
2010 was a strong year for specialty coffee retailer
, as shares of the $24 billion company rallied more than 40%. Starbucks is a perfect example of a company whose top line is driven almost exclusively by discretionary consumer spending. As a result, the company thrived in the mid-2000s, as middle-class Americans spent considerable cash on this novel chain -- and shares tanked between late 2006 and 2008, when consumers suddenly become less apt to part with their discretionary dollars.
That spending shift has changed in Starbucks' favor once again. All told, Starbucks ignited the premium coffee craze of the last decade, building more than 11,000 locations in just a handful of years as growth stayed in the double-digits. The company's move away from a complete reliance on retail locations has also been a trend worth watching.
Starbucks' VIA instant coffee brand has been a successful new product launch, and its other already successful grocery channel offerings continue to be big sellers. That said, the company's retail locations are likely to be the area of focus in the next several quarters. For that reason, we're betting on shares for the week.
has a stake in Starbucks, having increased its position by 918.9% in the most recent period, as does
, at 4.7% of the total portfolio. Startbucks, rated a
, was one of
For more stocks that made this week's cut, including
Stanley Black & Decker
, check out the
-- 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.