Updates from 5:45 a.m. EST
For my weekly Rocket Stocks column, I like to find beaten-up stocks that I believe may snap back in the coming days because of a specific catalyst. I constantly check the 52-week lows and analyst downgrades lists, hoping to spot an oversold gem from which readers and fellow investors can profit.
As I have pointed out before, picking stocks ahead of catalysts is the best way to profit for near-term traders.
Who cares if we are in a bull or bear market? Even if the market has a catastrophic week, at least a few hundred of the roughly 8,000 public companies will go up. It's our job to find the stocks most likely to do that.
includes names like
But before we look at this week's picks, let's review how
- Century Aluminum (CENX) - Get Century Aluminum Company Report: Up 13.6% on the week.
- National Oilwell Varco (NOV) - Get National Oilwell Varco, Inc. (NOV) Report: Up as much as 13% and ending the week up 8%.
- Alcoa (AA) - Get Alcoa Corp. Report: Up 5.6% on the week.
- J. M. Smucker (SJM) - Get J.M. Smucker Company (SJM) Report: Up 5.2% on the week.
- Southern Union( SUG): Up 3.1% on the week.
- American Railcar Industries (ARII) - Get American Railcar Industries, Inc. Report: Up 2.9% on the week.
- Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report: Up 1.8% on the week.
- NYSE Euronext (NYX) : Flat for the week.
- Cisco (CSCO) - Get Cisco Systems, Inc. Report: Down 1.5% on the week.
- Microvision (MVIS) - Get MicroVision, Inc. Report: Down 8.8% on the week.
- Syntax-Brillian( BRLC): Down 12.4% on the week.
Now let's take a look at the
First up this week is
, which is set to report earnings on Tuesday. As its name suggests, Kaiser manufactures and sells fabricated aluminum products used principally for aerospace and machinery end products. Down substantially from $80, where it was tradign in mid-December, Kaiser offers a nice play ahead of earnings now that it trades around $68.
Over the past two weeks there has been a massive amount of capital returning back into the aluminum stocks. Stocks like
have massively outperformed the boarder market since mid-January. Both Alcoa and Century handily beat analysts' fourth-quarter estimates aided by strong international demand.
Kaiser also has a great balance sheet with its return on assets at 14% and its return on equity over 20%. Kaiser has a low debt to revenue growth ratio with $60 million in debt and 11% revenue growth.
With a tight float and strong outperformance by its lesser peers, Kaiser could crush earnings this quarter.
Also worth keeping an eye on this week is
ahead of its quarter. Medtronic manufactures and sells various medical devices, in particular its Cardiac Rhythm segment.
Near its 52-week low ahead of the quarter, Medtronic stock offers a solid play ahead of its earnings report Tuesday. Management has been constantly taking market share from competitors
. Medtronic has a great balance sheet with operating margins just under 30%.
For the rest of this week's picks and more detailed analysis, check out the
As always, to find the snapbacks and potential breakouts on a regular basis, check out these Stockpickr portfolios, which I use in my own research each week:
- Today's Hot List: This daily list is a must-view every midday to see what stocks are making the biggest moves and why.
- Always check the Biggest Percentage Losers, a list of stocks that lost big the day before, because they can snap back hard. When you check this list on Stockpickr, you can see which stocks are owned by the quality hedge funds and mutual funds. Pay attention to those. They will be buying at the lower prices, so you should be also.
- Ditto for the 52-week-low list. You must check the above two lists every day if you hope to find volatile stocks.
- Biotech Short Squeezes: Dendreon (DNDN) and others can often be found in this category.
- Stocks Rising on Unusual Volume: These are potential breakout stocks.
- Stockpickr's System Trades of the Day: These are trades triggering that day in various back tested trading systems we've developed.
- Stocks With Unusual Option Activity: Perhaps someone knows something?
- Latest Activist Situations: These are beaten-down stocks that hedge funds are accumulating shares of and demanding change in. Believe me, these hedge funds piggyback each other. And once they start rocking the boat, things happen quickly. This should be on your must-view list.
One final place to frequent is the
section on Stockpickr, where ideas such as those presented in this article are thrown around daily.
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 president of
LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for the
and the author of
Trade Like a Hedge Fund
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;
to send him an email.
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