Stock Quotes in this Article: LB, PCLN, VZ, WFC, KORS

BALTIMORE (Stockpickr) -- In a typical year, the Memorial Day holiday serves as the kickoff for the stock market's quiet season. But 2014 isn't a typical year for stocks.

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Instead, we've been enduring "quiet season" for the last couple of months already, sitting on the sidelines watching the broad market grind sideways since the calendar flipped to March. Volatility has been extremely low over the course of this sideways correction as well, a contrarian indication that markets are overdue for a return to more directional trading. Put simply, we could be in store for an active summer for stocks. Are you ready for it?

To take full advantage of the trend, we're turning to a fresh set of "Rocket Stocks" for this week.

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 250 weeks, our weekly list of five plays has outperformed the S&P 500 by 77.79%.

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

Wells Fargo

First up is Wells Fargo (WFC), a firm that's earned a reputation for being the best of the big banks. That's not just subjective either. Since the first trading session of 2014, Wells isn't just the only big-four bank whose stock has avoided deep negative territory, it's also up 10.5% over those trailing five months. There's a reason why Mr. Market is showing Wells Fargo preferential treatment this year; and investors would be wise to pay attention.

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With more than $1.5 trillion in assets, Wells tips the scale as one of the four biggest banks in the country. Depending on which measuring stick you choose (assets, market cap, deposits and so on), the firm ranges anywhere from first to fourth in terms of scale. Investors in Wells Fargo today are benefiting from the firm's better-than-average positioning as it exited from the financial crisis. The firm entered the Great Recession in better shape than peers, and it's exited the same with a much less labyrinthine balance sheet and huge scale growth from its fire sale acquisition of Wachovia.

A major component of Wells Fargo's relative strength this year has been its hefty dividend payout. With a yield of 2.8%, WFC isn't just one of the fatter yields in banking -- it's also one of the most stable. With the potential for a rebound in interest rates on everyone's mind right now, investors are getting excited about the prospect of owning financial names in a rising rate environment. While that interest rate thesis is far from obvious at this point, it's obvious that investors are giving WFC favorable treatment from it.

We're betting on shares of this Rocket Stock to start the week.

Verizon Communications

Telecom giant Verizon Communications (VZ) is another Rocket Stock that tips the scales from its size this week. VZ owns substantial telecom infrastructure: its landline network reaches approximately a quarter of the U.S. population, its wireless arm serves more than 103 million customers, and it boasts one of the most ambitious consumer fiber optic platforms in the world in FiOS. Put together, it's the sum of Verizon's parts that make it so attractive to investors.

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As market saturation grows in the U.S., so too do customer acquisition costs. By bundling services together through triple-play packages, VZ can make a more compelling case for users to make the switch to its network. And it's also better-able to cross sell triple-play services to customers who presently only carry cellular service or FiOS TV through Verizon. In an industry where firms are vying for any advantage they can muster, Verizon has some big advantages indeed.

That's not to say that VZ is without fault. The firm considerably overpaid to acquire 45% of its Verizon Wireless business from Vodafone (VOD), for instance. But Wall Street doesn't seem to fazed by the occasional misstep. Instead, Verizon continues to outperform the S&P in recent months, and it sports a huge dividend payout that's looking even more attractive to investors as market conditions hold other names flat. With rising analyst sentiment flooding into shares this week, VZ makes the Rocket Stock cut to end May.

Priceline Group

It's hard to talk about recent relative strength without bringing up Priceline Group (PCLN). While the S&P 500 has managed to push an impressive 15% higher over the last 12 months, Priceline has outperformed in dramatic fashion, rallying 50% over the same time span. For investors looking for ways to capture overseas growth, Priceline is hard to beat.

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PCLN is one of the biggest online travel sites. The firm started off as the most popular of the "Name Your Own Price" sites, connecting bargain-hungry consumers with hotels' and airlines' excess inventory. Today, PCLN's reach has expanded beyond its original pricing model and beyond U.S. borders. As travelers abroad embrace online travel booking (particularly in markets like Asia and Latin America), PCLN is seeing its sales climb. So while travel has become commoditized in saturated markets such as the U.S., there's still a lot of market inefficiency to take advantage of in markets such as China.

But Priceline's growth efforts aren't solely focused abroad. The firm has been expanding its presence in value-added travel content through the acquisition of Kayak in 2012. By offering more travel content, sites like Kayak provide extra incentive for travel shoppers to buy trips through its site instead of a rival's platform. Ultimately, online travel sales are a battle for eyes on web pages, and PCLN is expanding its toolbox to capture those views.

Michael Kors Holdings

Apparel company Michael Kors Holdings (KORS) is one of just a few "growth names" that's actually managed to grow its share price in 2014. Since the calendar flipped to January, KORS has rallied close to 19%, besting a 2.8% run from the S&P. And as we get closer to the start of summer, this clothing and accessory brand is well positioned to keep up the momentum.

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In the last several years, Michael Kors has slingshotted from a niche celebrity designer label to a household name found in more than 1,300 retail outlets and desired by millions of mass-affluent consumers. The firm has done well catering to a population of spend-happy young professionals, a coveted group of super consumers. As the KORS' footprint grows with standalone stores (more than 533 of them worldwide at last count), margins should swell in kind.

Financially, Michael Kors is in stellar shape. The firm has historically managed to expand its footprint using cash from operations, growing its store footprint materially without resorting to debt. Instead, the firm carries more than $828 million in net cash as of their last filing.

Look for a potential upside catalyst when KORS announces fourth quarter earnings tomorrow.

L Brands

Last up on our Rocket Stocks list is another large-cap apparel stock: L Brands (LB). If this $17 billion name sounds less than familiar, that's because the firm shed its namesake "The Limited" label in two tranches in 2007 and 2010, changing its name to reflect the new business. The firm's stores include Victoria's Secret, Bath & Body Works, Henry Bendel and La Senza.

Victoria's Secret is the crown jewel of the L Brands portfolio. The store chain has a strong brand with celebrity exposure, it operates in the extremely high margin lingerie business, and it sports an economic moat for its trouble. Victoria's Secret is so successful, in fact, that less-entrenched retailers have been working hard to copy it (with limited success).

Big tailwinds in consumer spending have provided a rising tide that's lifted all ships in the retail space, and that's buoyed the rest of the L Brands portfolio. Most importantly, though, management's willingness to shed noncore assets (even if they're the firm's namesake) indicates that CEO and major shareholder Leslie Wexner is willing to make changes that are healthy for the business -- even hard ones. With rising analyst sentiment in LB, we're betting on shares of this Rocket Stock this week.

To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.


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At the time of publication, author had no positions in the names mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji