5 Rocket Stocks to Buy This Week

BALTIMORE ( Stockpickr) -- U.S. stocks keep putting distance between where they started trading for the year and where they sit today -- but that's not due to participation from retail investors.

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It's true. Bears may point to the recent pop in equity mutual fund flows as evidence that this rally is overbought, but that one-month data point is a little like shooting a squirt gun upstream. The long-term trend in fund flows remains very much against stocks. For the last seven years, retail investors have pulled $7.2 billion a month from their stock funds, on average.

In 2013, they've added around $500 million into U.S. stock funds each month. Irrational exuberance this isn't.

But as the macro trend continues to propel stock prices higher, it makes sense to remained positioned for more upside. To make the most of it, we're taking a closer look at five new Rocket Stock names worth buying this week.

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For the uninitiated, "Rocket Stocks" are companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the last 222 weeks, our weekly list of five plays has outperformed the S&P 500 by 89.23%.

Without further ado, here's a look at this week's Rocket Stocks.

Sirius XM Radio

Entertainment stock Sirius XM Radio ( SIRI) has been benefiting in a big way from some big tailwinds in the automotive industry. The firm has added more than 2 million new subscribers to its customer list in the last year, pushing its total subscriber count to 25.6 million paying subscribers. As the SIRI benefits from economies of scale in 2013, investors will continue to benefit too.

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Despite challenges from popular rivals such as Pandora ( P) and now Apple ( AAPL), Sirius XM's offering is relatively safe from competition. Why? In short, SIRI offers a very different set of services than iTunes Radio or Pandora. Because SIRI's content is actively curated and includes high-barrier content such as Howard Stern and NFL football, subscribers listen to the satellite radio network for very different reasons. The inclusion of satellite tuners in around two-thirds of all new vehicles this year provides a powerful source of new customers for SIRI -- the firm converts almost 45% of its trial users into paying subscribers.

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