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Updated from 6:12 a.m. EST

Stocks go through all sorts of growing pains all the time: There are missed earnings, misunderstood press releases, downbeat management meetings and negative analyst reports with which to contend. But sometimes the stocks that drop the most snap back the hardest.

Each week at, we search for those stocks that are underappreciated by Wall Street, with the thought that they can be ridden higher on a snapback move.

As readers know, I like to look for stocks that have potential catalysts ahead of them. The catalysts I look for vary from week to week, but typically they might include earnings, irrational selloffs, regulatory decisions, misinterpretation of company-specific news and other market-independent events that could push a stock higher.

Before we look at

this week's Rocket Stocks portfolio

, however, let's review how

last week's picks


  • Tractor Supply (TSCO) - Get Free Report: Up 20% on the week after the retailer reported better-than-expected earnings and a 15% sales jump.
  • Zimmer Holdings (ZMH) : Up 18.8% on the week after handily beating estimates. Revenue rose 15% year over year, and EPS came in at $1.12 a share. Analysts were looking for EPS of $1.04.
  • YRC Worldwide (YRCW) - Get Free Report: Up more than 20% and ending the week up 13.8% even after posting a drop in quarterly sales.
  • Cemex (CX) - Get Free Report: Up 12% on the week. The Mexico-based company reported a 43% jump in fourth-quarter net profit, showing that global growth is still intact.
  • Burlington Northern( BNI): Up 7% on the week after reporting solid earnings. BNI was a play off of CSX's (CSX) - Get Free Report earnings, and it worked out.
  • McDonald's (MCD) - Get Free Report: Up 6% on the week in spite of mixed news. The fast food chain posted an earnings beat but also a slowdown in December same-store sales.
  • Verizon (VZ) - Get Free Report: Up 3.9% on the week.
  • EMC (EMC) : Down 3% on the week despite beating Wall Street earnings estimates; the issue here was the spinoff of VMware's (VMW) - Get Free Report earnings, which were much weaker than analysts anticipated.
  • optionsXpress( OXPS): Up nearly 6% at one point but ending the week down 3.4%. The company reported a 44% rise in fourth-quarter profits. EPS came in at 44 cents. Analysts were looking for 43 cents.
  • Merck (MRK) - Get Free Report: Up as much as 3.7% but ending the week down 3.7% after the drugmaker reported fourth-quarter profits hit hard by charges.

Now let's look at some of the picks from

this week's Rocket Stock portfolio


First up this week is


(MTW) - Get Free Report

, a maker of cranes and other basic construction vehicles worldwide. I have highlighted Manitowoc as a Rocket Stocks pick before, and with good cause.

The stock recently has moved from a 52-week high of $51.49 (set Dec. 26) to about $39 currently. Shares of Manitowoc are now at a level from which they can climb if the company beats earnings estimates when it reports after Monday's market close.

Shares have been on a horrible side, in part because of an inaccurate assumption that global growth has been slowing. Manitowoc recently raised its 2008 guidance, saying that sales at its crane division should grow by more than 20% next year -- and that is after seeing 100% year-over-year growth in its backlog. Last week, internationally based stocks suggested that international growth is still strong.

Manitowoc is a potential earnings play and is worth a close look.

Also worth looking at is

Plains Exploration & Production


. With oil still generally trading north of $90 a barrel and natural gas prices ticking higher, Plains Exploration has the potential to rise in tandem.

The market has hardly focused on Plains' mid-December sale of some of its oil and natural gas fields to

XTO Energy

( XTO). Buying company assets low and selling them high is certainly one way to create shareholder value. Along with the sale, the company also announced a $1 billion stock-buyback plan. Earnings per share could come in 20% to 30% higher in 2008 as the buyback shrinks the share float and commodity prices remain high.

Other names worth checking out are


(GOOG) - Get Free Report

, which could snap back after an earnings disappointment last week, and

Ram Holdings

( RAMR), another potential snapback play, as well as

Yum! Brands

(YUM) - Get Free Report

ahead of earnings and

Archer Daniel Midland

(ADM) - Get Free Report


For more detailed analysis and the rest of this week's picks, check out the

Rocket Stocks for the Week of Jan. 28-Feb. 1


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 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

Financial Times

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;

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