Stock Quotes in this Article: AMAT, CMI, MJN, STI, VMW

 BALTIMORE (Stockpickr) -- Earnings are owning the market this week, with more than 50 firms expected to report their numbers to Wall Street between now and Friday. That slew of earnings data, coupled with an economic data dump, should take some of the onus off of Europe in February just as missteps in Greece threaten to derail Mr. Market’s upward trajectory.

The EU has largely been an absent factor from U.S. stocks in 2012, and investors would like to keep it that way. Luckily, we’re in a different market in February than we were in the third and fourth quarters of 2011. Now, with eurozone risks largely priced into share prices here at home, it would take a truly unexpected sudden event in Greece to actually torpedo stock prices again.

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And meanwhile, good earnings and a series of positive economic developments have been ratcheting investor sentiment higher. This week, we’ll capitalize on that with a new set of Rocket Stocks.

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 139 weeks, our weekly list of five plays has outperformed the S&P 500 by 82.75%.

With that, here’s a look at this week’s Rocket Stocks.

VMware

So far, VMware (VMW) is having a good 2012. Shares of the virtualization firm have rallied more than 13.6% already in the new year, besting the broad market by a factor of two. That’s thanks in large part to continued breakneck growth of VMware’s revenues, which climbed 27% to $1.06 billion for the fourth quarter.

It's looking that that growth pace is going to continue in 2012.

VMware develops virtualization software that’s used to transform a single physical computer into multiple virtual machines. The real-world uses of the firm’s technology range from making data centers more cost efficient to operate to enabling employees remote access to their work PCs.

The datacenter infrastructure business has largely been VMware’s bread and butter since the firm’s founding, but desktop solutions have become an attractive (if competitive) market for the firm. It’ll need to continue to innovate if it wants to build its installed base on desktops.

Meanwhile, the firm’s huge installed base in server virtualization for datacenters gives VMware some big advantages. After all, datacenters have much higher switching costs and a big installed base means that the firm is able to effectively market new products to customers who’ve proven their willingness to shell out cash on IT solutions.

While competition has been ramping up lately, VMware still has advantages in a growth industry.

VMware, one of TheStreet Ratings' top-rated software stocks, shows up on a recent list of 7 UBS Stock Picks for 2012 and was one of Goldman Sachs' Top Tech Stocks for 2012.

Cummins

It’s hard to imagine that Cummins (CMI), one of the world’s biggest manufacturers of diesel engines for big trucks and buses, is green. But the firm is also the largest manufacturer of natural gas and hybrid bus engines in the country, positioning that definitely puts a green tint to the black smoke pouring out of a diesel powerhouse.

For firms that operate trucks and buses, green can also mean money, and alternative fuels can also be a cost-effective alternative to the high price of oil. As oil prices ratchet higher, Cummins should benefit from trends in alternative fuel engines.

That’s not to say that heavy-duty diesel isn’t still Cummins’ core business. Today, Cummins is a completely integrated heavy engine maker, manufacturing everything from turbochargers, power units, and filtration systems used on its engines. That wider product net means lower costs for the engines that come out of CMI’s factories and more selling opportunities outside of the OEM market.

One of the most impressive parts about Cummins is the fact that this industrial manufacturer has found favor with the consumer market. Today, you can buy a Dodge Ram equipped with a Cummins turbo diesel engine -- an option that 80% of eligible Ram buyers opt for.

The consumer market makes up more than 10% of CMI’s business right now. If it can find its way into more light trucks, growth potential is significant.

Cummins, one of 10 S&P 500 Stocks for 2012, shows up on a recent list of Stocks in Bottoming Sectors Primed for a 2012 Bounce.

Applied Materials

Applied Materials (AMAT) is having even better performance than most this year. So far in 2012, shares of the semiconductor and solar firm have rallied nearly 21%, buoyed by strength in the market for Chinese solar this year.

That’s a big about face for AMAT -- in 2011, sluggish solar sales were actually one of the biggest drags on the firm’s share price. Now sticking with a disliked business could be paying off.

Applied makes the tools that other semiconductor firms use to manufacture chips, a fragmented business where Applied Materials holds standard-bearer status. Chipmaking tools is a business where scale counts. Because few rivals can afford the massive R&D budget that AMAT has, and since the firm’s enormous installed base provides a big sales net to cast, the company has a palpable competitive advantage right now.

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Chipmaking is capital intense, and manufacturers know that. As a result, they’re willing to spend massive amounts of cash to outfit their factories with the latest chip fabrications tools. Now, as the firm’s foray in to the solar business starts to propel shares, investors who held out during a cyclical downturn in both businesses are looking at a strong combination for 2012.

With analyst sentiment for Applied on the upswing, we’re betting on shares this week.

SunTrust Banks

Atlanta-based SunTrust Banks (STI) is facing a very different environment than it was during the financial crisis. This regional banking name sacrificed investor dilution to get TARP funds off its balance sheet, a move that gives the firm the ability to operate without governmental oversight.

That’s not all that STI shoved off its balance sheet. The firm has also written down most of the toxic debt positions it held ahead of the 2008 financial collapse, a fact that makes evaluating SunTrust’s prospects a whole lot more straightforward.

SunTrust is a big name in the Southeast, a region that got hit particularly hard by the financial crisis. But economic growth in the region stands to offset the negative exposure from the crisis -- especially given the firm’s massive share of deposits in states such as Florida. With most of the skeletons shaken out of STI’s closet, this firm just needs to start showing investors margin and deposit expansion to justify its existence in their portfolios.

In the meantime, sparking analyst sentiment in shares of STI is our reason for betting on shares this week.

For another take on SunTrust, one of 10 Regional Bank Stocks to Watch in 2012, it shows up on a recent list of 5 Booming Bank Stocks Poised to Fall.

Mead Johnson Nutrition

Some major black clouds emerged over shares of Mead Johnson Nutrition (MJN) back in December, when it was suspected that a batch of the firm’s Enfamil line of infant formula may have been tainted with cronobacter bacteria, resulting in the death of an infant in Missouri and two other cases of serious hospitalization. But the CDC determined in early January that the formula wasn’t to blame, welcome news for both parents of infants and for Mead Johnson shareholders.

Mead Johnson is one of the biggest manufacturers of pediatric nutrition products, both through its Enfamil baby formula and nutrition products for older children. With more than $3.1 billion in sales last year, Mead Johnson takes home approximately 40% of the formula market, a huge business that’s income independent. Low-income families on the WIC program are able to buy MJN’s Enfamil products without watching the price of formula. That’s a major factor in this stock’s recession resistance.

That said, the market for formula is saturated here in the U.S. For more significant growth, MJN has been working on capturing a growing chunk of emerging market countries, where formula use isn’t as prevalent, but where a growing trend of two-income households could make formula a more popular option in the years ahead.

With more than half of the firm’s sales coming from abroad right now, the firm is more than capable of harnessing that trend.

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, based out of Baltimore, is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.