Stock Quotes in this Article: ADSK, AMG, AMGN, DOW, SIRI

BALTIMORE (Stockpickr) -- The S&P 500 may not have moved much last week -- just 0.46% -- but it was certainly an eventful week to be an investor.

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Between a new set of Fed minutes, an announcement that Microsoft (MSFT) CEO Steve Ballmer was retiring (which sparked a $20 billion boost in the stock's value), and a three-hour trading halt in the Nasdaq, it was an action-packed week. But ultimately all three of those bombshells are better attention grabbers than they are market movers.

More relevant is the big bounce that the S&P took off of its long-term trendline last week. That paints a bullish picture for stocks, even as investors are more anxious than ever. To take advantage of that mismatch, we're turning to a new set of Rocket Stocks 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 212 weeks, our weekly list of five plays has outperformed the S&P 500 by 87%.

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

Amgen

2013 is panning out to be a strong year for $80 billion biotech giant Amgen (AMGN). Shares of the firm have rallied nearly 23% year-to-date, outperforming the S&P 500 by a considerable margin, and that's on top of the 34% that shares increased during 2012. This week, AMGN is making news after finally getting the go-ahead to buy Onyx Pharmaceuticals (ONXX) in a deal worth $10.4 billion. The crown jewel in the deal is Kyprolis, a cancer drug that's still in the early stages of its lifecycle.

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Amgen is no stranger to blockbuster drugs. Right now, the firm has more than five drugs that each bring in over $1 billion in sales. Amgen's expertise in biotechnology-based therapeutics is unique among firms its size. It gives the firm an advantage over smaller rivals in the amount of capital it's able to throw at a project. As a result, AMGN has around 20 new drug compounds in its early stage pipeline (not counting the addition of Kyprolis further downstream).

This company is an expert at converting sales into cash. Around one-third of every dollar that Amgen brings in gets converted into free cash, the result of hefty profit margins and economies of scale in Amgen's business. With increasing analyst sentiment pouring into shares this week, AMGN tops our list.

Sirius XM Radio

Satellite radio company Sirius XM Radio (SIRI) has been benefitting from big tailwinds in new car sales. The one-two punch of record low interest rates and an older national car fleet than ever has given new auto sales a shot in the arm in the last couple of years -- and since SIRI's tuners come preinstalled in more than two-thirds of new vehicles, the firm is enjoying a key pipeline of new customers right now. That lead creation mechanism helped push Sirius XM over the 25 million subscriber hurdle this year.

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SIRI's business isn't without competition. Increased in-car connectivity has opened the door for rivals like Pandora (P) to take a piece of the pie. But Sirius XM gets the fact that content, not just accessibility, is key to keeping paying subscribers. By offering coveted content like Howard Stern and the NFL, as well as uncensored talk radio and curated specialty channels, the firm draws a bigger, more engaged crowd. And that keeps customer renewing.

For years, SIRI's huge fixed-cost structure has been its Achilles heel. But now that the profitability threshold has been taken out, investors should continue to warm to the firm's business model -- even if it can't keep up this growth pace forever.

Affiliated Managers Group

For a ramped-up bet on the stock market this year, it's hard to beat Affiliated Managers Group (AMG). That's because this $9.5 billion financial firm has its hands in some of the most interesting corners of the money management business, an industry that sees its revenue base balloon when stock prices rise. That's a big part of why AMG has managed to rally more than 37% since the calendar flipped over to January.

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AMG is unique because it doesn't actually manage money itself. Instead, Affiliated Managers holds ownership stakes in a collection of small to midsized boutique investment managers. Because AMG's interests are spread across a large number of firms, it's able to get exposure to a broader basket of specialized asset classes than a single firm could. While that does mean that AMG foregoes some cost savings by replicating many roles at each firm, the lack of a centralized investment edict from the top means that clients can have exposure to uncorrelated strategies at AMG's firms and the firm can collect higher fees.

Affiliated has rallied so hard in 2013 for a very simple reason: as all of the assets that its clients own climb during this rally, the firm gets to multiply its management fees across a bigger pool of cash. In my view, the stock market isn't showing too many cracks just yet -- and AMG should continue to benefit as a result.

Autodesk

Autodesk (ADSK) owns a lucrative corner of the software world: computer aided design. The firm's AutoCAD product has been the industry's standard-bearer since it was introduced in 1982, and today it boasts around 12 million users around the world. The dominance of ADSK's platform among designers and engineers gives it a huge economic moat going forward.

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The inherent complexity of computer-aided design products gives ADSK a big advantage: high switching costs. After investing considerable time and effort to gain expertise in one software platform, customers are unlikely to jump ship for any but the most serious reasons. Perhaps more important than sunk time, proprietary formats up the ante in switching platforms for existing projects -- you can't change software without the likelihood of problems converting your files.

To keep its huge share of the market, ADSK has been putting its focus on students. As the industry standard, ADSK makes its software available to educational institutions through inexpensive licenses, which ensures that the next generation of professionals enters the workforce trained up on the latest version of AutoCAD. The introduction of software "in the cloud" could be a major boon to ADSK, creating big recurring revenue streams and turning reluctant software pirates into legitimate licensees.

Shares reacted well to the firm's second quarter earnings on Friday, so we're betting on ADSK to start this week.

Dow Chemical

While it may lack the excitement factor of a satellite radio operator or a famous software firm, Dow Chemical (DOW) is no stranger to being a household name. Since its start in 1897, Dow has become one of the largest chemical and materials firms in the world, creating brands such as Styrofoam, and having a hand in nearly every industry imaginable. Dow's scale and diversification make it a formidable blue chip name with the hefty 3.3% dividend yield you'd expect to go along with it.

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Like other chemical firms, Dow has spent the last few years positioning itself for the future. The firm's considerable exposure to the agrichemical business and specialty materials used by technology manufacturers are evidence of that. The shift means that Dow's focus has changed from selling lots of basic chemicals (with no competitive advantage and lots of rivals) to focusing more on materials where it has a moat and can collect bigger margins for its efforts. Investors should applaud those efforts.

Meanwhile, Dow still has considerable operations making more legacy products like plastics and basic chemicals. But recent pressure on commodity prices (particularly natural gas) has helped to shove margins higher by trimming input costs at the same time that inflation was boosting soft commodity prices. With net margins deep in the double digits, and a well-capitalized balance sheet, DOW is in good shape to end the year on a high note.

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 stocks 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