BALTIMORE (Stockpickr) -- Memories of barbecues and relaxation from the long Memorial Day weekend are fading, and the market is coming back into focus this morning. Three-day weekends can be a useful reprieve for market participants -- especially when volatility is high and investors need a breather.
The thing is, markets have been anything but excessively volatile in 2015.
In fact, the VIX Volatility Index is currently at its lowest levels of the year, after plummeting since the end of 2014. A rough and tumble stock market this isn't. And that's not necessarily a bad thing at all. More importantly, performance is finally starting to wake up in the S&P 500 this May.
So with stocks pressing up against fresh all-time highs this week, we're turning to a fresh set of Rocket Stocks to find some outperformance this month.
For the uninitiated, "Rocket Stocks" are our list of 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 300 weeks, our weekly list of five plays has outperformed the S&P 500's record run by 79.78%.
Without further ado, here's a look at this week's Rocket Stocks.
At the top of the list -- in terms of size, anyway -- is IP networking firm Cisco Systems (CSCO). Cisco is the biggest company in the business, supplying routers, switches, software and other technology that forms the backbone of the world's network infrastructure. At corporate America works to bring more data into "the cloud," demand for Cisco's products should continue to move higher.
Cisco benefits from its huge market share. Because Cisco's gear is designed to plug-and-play with other Cisco components, IT departments that buy Cisco products can often see much lower integration and ongoing technical support costs. That gives Cisco an important economic moat right now, even if competition is trying to move in on its business. Likewise, more integrated Cisco products, like turnkey servers, should help the firm grab bigger margins from customers looking for a unified solution to getting content online.
From a financial standpoint, Cisco is in excellent shape right now. The firm's current net cash position stands at $33.4 billion, enough to cover more than 22% of CSCO's current total market capitalization. Ex-cash, Cisco's shares trade for just 13-times earnings, a relatively cheap price tag given current market valuations. That's a big risk-reducer for investors this summer.