By Jonas Elmerraji
Posted on Nov. 23, 2009
As well as broad-based indexes have performed in the last few months, Stockpickr's weekly Rocket Stocks list has managed to do significantly better.
In fact, over the trailing 18 weeks, investing in each week’s picks at Monday’s market open and selling at Friday’s close would have delivered 35.16% outperformance over the S&P 500.
With stocks opening higher this morning, there's a chance we'll see an even bigger rally this week in our Rocket Stocks list of beaten-down stocks with near-term growth catalysts and long-term growth potential. After a week last week that saw the S&P 500 slide 0.19%, a beginning-of-the-week uptick is exactly what’s needed to re-instill confidence and continue the rally that’s added more than 26% to the S&P since July.
Before we get to this week's picks, let’s take a look at exactly how last week’s picks performed.
Topping the charts last week was big pharma play Bristol-Myers Squibb (BMY), which rallied 5.52% last week following the announcement that it was splitting off a subsidiary and giving the proceeds to shareholders in the form of additional shares of the company.
Apparel brand Philips-Van Heusen (PVH) also fared well last week, delivering 3.63% returns to investors after a Nov. 18 earnings release. Beverage mega-brand Coca-Cola (KO) also did well, returning 1.81% in the last five trading days.
On the lower end of the spectrum were C. R. Bard (BCR) and Linear Technology (LLTC), which slid 0.05% and 2.65%, respectively.
Now on to this week’s Rocket Stocks list.
For super-retailer Wal-Mart (WMT), an increase in insider buying is only the latest reason to consider picking up shares of the company’s stock.
Despite deteriorating economic conditions, Wal-Mart shareholders were among the few that actually saw their investment increase in value in 2008. And while shares have stay fairly flat in 2009, the company has continued its tradition of growth and business performance.
Wal-Mart’s sheer size makes it worth watching as consumers step up their shopping in the most significant retail day of the year: Black Friday. With pricing control over suppliers, and brand name recognition that’s hard to deny, Wal-Mart’s competitive advantage should serve it well this week, especially as consumers begin to increase their spending this holiday season.
Campbell Soup (CPB) has made our Rocket Stocks list in the past, and with earnings slated for 10 a.m. today, this stock could go places once again.
The company is the biggest soup manufacturer in the world, and a recent 10% dividend hike suggests that management feels financially secure enough to deliver more cash to shareholders.
Most analysts have a positive outlook for the company as well, and realistic expectations mean that Campbell might be able to pull out a surprise by beating out analyst expectations, a phenomenon that’s sure to cause shares to surge.
Despite tough economics for high-end jewelers, Tiffany (TIF) is making this week’s list as well.
With consumer sentiment on the upswing, and the holiday season approaching, Tiffany is one of the best-positioned companies to stage a turnaround.
After all, this stock offers significantly thicker margins than the competition, meaning that any increase will affect Tiffany’s bottom line considerably more than most any other jeweler’s stock. And with earnings slated for Nov. 25, there’s a short-term catalyst for growth already in place.
Analysts are, not surprisingly, pessimistic about Tiffany's ability to deliver significant growth this quarter, despite the fact that in its last release management touted a slowing sales decline in many of the company’s stores. This should continue well into 2010.
For more stocks that made this week's cut, including DeVry (DV) and Travelzoo (TZOO), check out the Rocket Stocks portfolio at Stockpickr.
At the time of publication, author had no position 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.
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