Updated from 6:31 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 low and analyst downgrade 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. Even if the market has a disastrous week, at least 1,000 to 2,000 of the roughly 8,000 public companies will go up. It's our job to find and bring you those stocks.
is based on earnings as well as a few snapback plays.
But before I make any recommendations, let's take a quick look at how last week's picks panned out in the turbulent market.
- VF Corp. (VFC) - Get Report: Up 11.4% after this beaten-down retailer offered robust guidance.
- Sciele Pharma (SCRX) : Up 9.3% on the week.
- Robbins & Myers (RBN) : Up 8% to hit a 52-week high after the company posted earnings per share of 80 cents, compared with the 67 cents a share analysts were looking for. The stock ended the week down 0.5%.
- Harmony Gold (HMY) - Get Report: Up 7.2% on the week.
- Aluminum Corp. China (ACH) - Get Report: Flat for the week.
- CVS (CVS) - Get Report: Down 1.8% for the week.
- Intel (INTC) - Get Report: Down 3.6% on the week.
- Tesoro (TSO) : Down 12.4% as crack spreads continued to head lower, hence profit margins are getting squeezed.
- Synchronoss Technologies (SNCR) - Get Report: Down 20.4% on the week.
- Microvision (MVIS) - Get Report: Down 22% on the week as a large investor stated that he was going to sell his stake.
Now on to
First up is
, which is down a quick 100 points from its all-time high. Fundamentally speaking, Google couldn't be doing better. Its recent deal for DoubleClick got past U.S. regulators without a hitch. Search competitor
is near its 52-week low and is losing market share, business and clicks to Google all the time.
Google makes a substantial amount of money during the holiday season as it raises its search fees and add spots for companies vying for customers. Google makes money every time someone clicks on these paid ads, netting a small amount of profit each time someone searches. As we saw from
, online sales were great, hence Google is doing great.
I have a feeling that the downside pressure that Google saw is due in part to some funds selling their stake to raise capital. With $14 billion in cash and no debt, Google is growing earnings at 30%. Google's a buy.
Next up is
, a maker of international cranes and other basic construction vehicles worldwide. Recently, shares of Manitowoc have moved from a Dec. 24 high of $52 a share to $41 a share, in part because of an inaccurate assumption that global growth was 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. Here I am going with management and not the masses, who are selling the stock down.
Polo Ralph Lauren
is also good for a trade. Polo, like all the retailer stocks, has been beaten to a pulp. The maker of high-end clothes has fallen from $102 a share back in mid-July to $58 a share recently, making it great for a snapback play in the retailers.
While Ralph Lauren doesn't have any direct catalysts, news from teen retailer
suggested that the bottom was in for the retailers.
Also making this week's list is
, which is set to report earnings after the close on Monday. By all accounts Genetech's flagship drug Avastin is selling very well and should help the bottom line. With shares down 17% in 2007 this mega biotech company is a great defensive way to play into a turbulent market.
For more detailed analysis and the rest of this week's picks, 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 backtested 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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