Stock Quotes in this Article: EMC, F, MS, MU, S

BALTIMORE (Stockpickr) -- The dust is settling from last week's selling. All told, it was the worst single week for stocks since all the way back in August. The S&P 500 index sold off a whopping 1.6%, knocking 2013's market performance down to a "gaunt" 24.48%.

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The reality is that it's pretty telling when a 1.6% decline is the biggest one-week loss in around four months. This rally has been consistent and low-volatility all the way up.

And this morning, stocks are pointed toward reclaiming some of those lost points. With December's end drawing nearer, it's probably a pretty safe bet to expect we'll get an interesting end to this year's trading. After all, scores of institutional investors are looking for a last-minute boost before the books get shut for 2013. That means there are likely to be some big opportunities in the most well-liked equity names in the next two weeks.

To take full advantage, we're taking a closer look at five Rocket Stocks worth buying.

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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 227 weeks, our weekly list of five plays has outperformed the S&P 500 by 86.25%.

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

Ford Motor

First up is Detroit automaker Ford Motor (F). Ford has been riding a positive wave of car sales for the last several years, which is not showing any signs of slowing now, particularly since December is typically the highest sales month of the year. Ford's status as best-in-breed car stock got cemented during the Great Recession, when it stood out as the only Detroit giant that didn't take government bailout funds. But for consumers, the most important thing about Ford is the fact that it's building really good cars again.

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Ford's lineup has been completely revamped in recent years, and the firm has leveraged common platforms in order to keep costs reasonable without sacrificing quality. Another big change was Ford's focus. The firm unloaded its less-profitable brands in the wake of 2008, only hanging on to Lincoln in addition to the namesake blue oval. If Ford can continue to give Lincoln an identifiable market presence (with cars that look like something other than re-badged Fords), it could have a real premium segment contender on its hands.

Commercial vehicles are another spot where Ford has been quietly shining. The introduction of the Ford Transit Connect van to the U.S. is opening a new segment that's been popular in Europe for years. Labor relations are still a major concern for Ford going forward -- the firm needs to keep good relationships with its unions to avoid becoming overburdened by huge obligations once again. But now that the alternatives have been made clear from the bankruptcies at GM and Chrysler, both sides are coming to the table with open eyes.

With rising analyst sentiment in Ford, we're betting on shares this week.

Micron Technology

Micron Technology (MU) is the momentum name that just won't stop this year. Shares of the $24 billion flash memory maker have rallied more than 264% since the first trading session of 2014, outperforming the broad market by a factor of more than 10. And with shares of MU pressing up against new highs last week, it doesn't look like the run is losing steam.

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Until recently, Micron's main business was manufacturing RAM for PCs. But the company has spent the last several years building its flash memory business, a change that exposes Micron to a far more lucrative niche. Flash memory has been in huge demand in recent years, buoyed in large part by demand for mobile devices, which use the faster, more compact memory type. The increasing use of solid state drives in consumer PCs is another big trend that Micron is riding. As flash-based storage makes its way to more consumer-driven computers (versus prosumer machines), MU stands to benefit in a very big way.

Micron's scale gives it distinct advantages, namely deep relationships with OEMs that need big, predictable supplies of flash memory for their products. And perhaps surprisingly, MU sports a P/E ratio of just 24.3 after all of that upside. While that's higher than it was a few months ago, it's far from an insane valuation given the firm's growth rates. Micron has been an insane mover in 2013, but the fundamentals justify those moves.


Another tech name on our list of Rocket Stocks this week is EMC (EMC). EMC, one of the biggest names in network storage, develops and sells the software and hardware used to link storage devices together in the cloud. That means that EMC has some huge tailwinds pushing at its back right now, as demand for cloud data storage goes parabolic.

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As enterprise storage needs continue to increase, innovation at EMC will continue to earn premium margins. EMC's 80% ownership position in VMWare (VMW) is another big boost for shareholders -- it provides a liquid asset on the balance sheet and a business with more exposure to consumer and small-business customers on the income-statement side.

From a financial standpoint, EMC is in excellent shape. The firm currently sports more than $10 billion in net cash and investments on its balance sheet, enough to cover more than 21% of EMC's current market capitalization. That level of cash creates a huge risk reduction for investors – and it puts a meaningful discount on the firm's earnings multiple.

With sentiment on the upswing for EMC this week, we're betting on shares.


No. 3 U.S. cellular carrier Sprint (S) is getting lots of attention this morning after rumors hit that it could be considering an acquisition of T-Mobile (TMUS). The move would be the latest in a series of transformations for Sprint, which itself got 78% of its shares acquired by Japan's Softbank. Expect Softbank to have a big role in bankrolling any potential T-Mobile takeover.

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Sprint's market position may put the firm in a distant third place to AT&T (T) and Verizon (VZ) by subscriber count, but it's important not to discount the value of the cellular assets that Sprint brings to the table. It also important not to discount the value proposition Sprint is trying to sway cellular subscribers with: the firm is one of the few that still guarantees unlimited data packages, for instance, and it does so at a lower cost than its bigger rivals.

Softbank's investment in Sprint involved a $5 billion cash infusion that presents a lot more options for the carrier. Sprint's balance sheet looks a whole lot more attractive than it did this time last year. As Sprint standardizes its product offerings (by moving legacy Nextel customers to Sprint), it should be able to improve profitability and service. A T-Mobile acquisition could make a lot of sense for Sprint, particularly since it would likely clear the regulatory hurdles with ease.

Morgan Stanley

Last up is Morgan Stanley (MS). The financial services firm is having a great year in 2013 -- not that that's especially surprising. Morgan Stanley's huge exposure to the investment world means that MS is basically a leveraged bet on the markets. What is surprising is how good the year has been for this stock. Shares are up nearly 63% since the calendar flipped over to January.

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Morgan Stanley is one of the few remaining legacy investment banks left over from the financial crisis. With a lucrative client list, increased transaction volumes have benefitted MS more than most in 2013. The firm's other financial services, such as wealth and asset management, have been buoyed by higher prices for assets. With prices on the rise, Morgan Stanley's cut for assets under management is bigger too.

Like many other financial firms, a return to higher interest rates implies higher profitability for Morgan Stanley -- it means that the margins that MS earns on many of its rate-sensitive businesses can scale in kind. So, considering Morgan Stanley's valuation today, there's considerable earnings power that's yet to be unlocked by a more normal environment.

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 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 Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji