BALTIMORE ( Stockpickr) -- M&A activity is back in the spotlight this week. Already in Monday's premarket, a handful of high-profile acquisition announcements are getting positive feedback from investors as they bid up shares of both the acquirers and buyout targets ahead of the market open at 9:30. That behavior is pretty telling about market sentiment right now: as investors feel increasingly positive about stocks, they're much more likely to bid up buying firms before they know the full implications of the deals.Instead, they're issuing a vote of confidence that management will do the right thing to increase shareholder value. As a result, we could see a surge in stock valuations this week as Wall Street gets its legs back. Last week provided us with a push above a significant market resistance level, with major bullish moves on Monday and Friday. This week, we'll attempt to capitalize on any upside action with a new set of Rocket Stocks plays. >>>5 Window-Dressing Stocks That Could Surge We're turning to stocks with rising analyst expectations to eke maximum sentiment out of the markets. I identify those stocks by running a quantitative screen that picks out companies with a recent series of analyst upgrades and a history of outperforming the Street's expectations. It's a methodology that's worked well for us in the past: Our list outperformed the S&P 500 by 83 basis points last week. That brings our total dominance over the market to 66.59% over the past 62 weeks that we've been keeping track of our Rocket Stocks' performance. This week, we'll attempt to continue our trend with 5 new stocks.
Shareholders of Eaton ( ETN) are having a good year in 2010, with shares of the Cleveland-based power management firm up nearly 30% in the last nine months. Coupled with a generous dividend payout, the company is actually up almost 3% more since the beginning of the year. Strong fundamental performance at Eaton should keep that performance up for the rest of the year.
Nike ( NKE) has been an interesting stock to watch lately. Despite market saturation and absurd competition in both the North American and European markets, the company continues to make money hand over fist thanks to innovative designers and one of the most popular brands in the world. In the next few years, an increased focus on emerging markets could be the key to sustained growth.
That hasn't always been the case with MetroPCS Communications ( PCS), a mid-cap cellular carrier that provides service to more than 7.6 million subscribers in the U.S. Operating in a highly competitive, capital-intense industry has done a good job of keeping potential investors away from shares of the company. But there are more than a few positives for this small cell stock.
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