Stock-picking games such as the

TheStreet.com's

Beat the Street

contest offer a great way to build a certain discipline in stock-picking.

To compete, let alone win, such a contest, it's not good enough to select quality stocks that you think are likely to move up slowly but surely over the next two years; you need to choose stocks that can accelerate

right now

.

There's an urgency to these stocks. They are volatile, they have a catalyst, and somehow or other, they are cheap. In other words, they are more likely to go up 40% than down 40%, but certainly the latter is possible.

Keeping a constant eye out for such stocks -- a discipline you have to hone if you are going to compete in a stock-picking contest -- will also help you keep an eye out for longer-term trading possibilities that can become very cheap in the short term.

In my previous columns about Beat the Street --

How to Win a Stock-Picking Contest

and

Beat the Street by Playing Ugly

-- I wrote about

Crystallex

(KRY)

,

Movado

(MOV) - Get Report

and

Global Payments

(GPN) - Get Report

, all of which have done very well. (You can still sign up for

Beat the Street

-- it's free, and the grand prize is $100,000.)

I've updated the list for all the earnings activity this week and set up my next watchlist of Beat the Street stocks,

Contest Stocks II

, on Stockpickr. As part of my research in compiling this watchlist, I gleaned this from several Stockpickr portfolios:

  • Top 20 Most Volatile, stocks that are most volatile on earnings days.
  • 10 Short Squeezes, an updated list of stocks with high short interest and high insider buying. If you pit the insiders vs. the shorts, the insiders have a high likelihood of winning, and that's worked well over the past few months.
  • Biggest % Losers, a list of stocks for which we describe when and how each was crushed. Stocks that are crushed are more likely to snap back huge than stocks that are at 52-week highs. That's not to say stocks at their 52-week highs aren't good buys; they just aren't likely to go up another 40% in a week. Or even 2%.

Among the Beat the Street names on my

Contest II Stocks

list is

Jos. A Bank Clothiers

(JOSB)

. Why does it make my list of stocks that have the potential to move significantly higher this week?

  • The stock traded 10% lower Thursday after the retailer reported lower-than-expected same-store sales growth. The market ignored the fact that same-store sales were still 10% higher year over year.
  • There are 7.6 million shares short the stock, which would require 18 days of nonstop short-covering should the stock move higher. This stock is set to explode if it ticks upward.
  • The company trades for less than 10 times cash flows with double-digit growth. Earnings per share are expected to climb from $1.95 in 2006 to $2.24 for fiscal 2007 to $2.54 for fiscal 2008.
  • It releases earnings Tuesday, April 17.

One of my favorite bloggers, Crossing Wall Street, lists Jos. A Bank among his

Top 20 Stocks for 2007

.

Next, let's look at

OptionsXpress

. Here are the reasons this stock makes the list:

  • It reports earnings Thursday, April 19.
  • It trades for 10 times cash flows.
  • Its 25% year-over-year growth means it's cheaply valued.
  • It's a takeover target because all exchanges are ripe for consolidation. (And if you don't believe me, its CEO, David Kalt, had this to say in a recent interview with MarketWatch: "Consolidation is the one constant that remains in our industry.")
  • The stock is about 30% off of its 52-week highs.
  • It has exceeded estimates in each of the past four quarters.
  • Analysts have upped estimates for this quarter in the past 90 days.

OptionsXpress also appears on my list of

Top Growth Surprises

. This is a list of those stocks that have a price/earnings-to-growth, or PEG, ratio of less than 2 and a growth rate greater than 25% and that have been getting upwardly revised analyst estimates. The stocks on this list are also solidly off their 52-week highs.

Other stocks on the Top Growth Surprises list include

eBay

(EBAY) - Get Report

and chipmakers

Applied Materials

(AMAT) - Get Report

and

KLA-Tencor

(KLAC) - Get Report

, names that I believe offer both growth and value.

My list of contest stocks also includes

Motorola

(MOT)

, which I believe could surprise on its call this week, as well as one IPO play that I actually believe is a quality stock and is ready to break out here.

For the full list, check out my

Contest Stocks II

portfolio on Stockpickr.

For my prior list, which I compiled and wrote about three weeks ago, check out the

Beat the Street Watchlist

.

At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.

James Altucher is a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of

Trade Like a Hedge Fund

and

Trade Like Warren Buffett

. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;

click here

to send him an email.

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