By Stockpickr Staff
Posted on June 1, 2009

With the indices on the rise, it's a prime opportunity to search out rocket stocks, or beaten-down stocks that have the potential to snap back in the coming days because of specific catalysts that could play out. A rocket stock is particularly attractive when it has near-term growth potential and also qualifies as a solid long-term play.

Sometimes we find short rocket stock ideas, too, or stocks that we think could shoot lower in the coming days.

Without further ado, here is this week’s Rocket Stocks portfolio.

Immucor (BLUD) is a long trade this week ahead of its fiscal 2010 guidance, which it will announce on June 1 after the market close. The stock will likely trade 15% to 20% higher, in the $17 range, with tonight's announcement likely to include the following:

1. Full-year 2010 EPS of $1.20, higher by 5 cents to 10 cents than Wall Street's estimates, based on improved sales and estimates for Immucor's new Galileo II machine.

2. A new buyback, to the tune of 2 million to 3.5 million shares, or 5% of the float, as management takes advantage of a historically depressed stock and uses excess balance-sheet cash to improve shareholder value.

3. Additional comments regarding an investigation by the Department of Justice, which will ease investor's only concern about the stock.

Immucor is the leading company in the blood bank equipment and reagent market, which seeks to prevent or even cure certain diseases and conditions through the testing and transfusing of blood and blood components worldwide. It is estimated that by 2018, health-care-related costs and expenses will account for 20% of the U.S. GDP, and Immucor is a play off this growing trend.

The company sports 50% market share in the U.S., with roughly 40 million or so blood donors annually, and it controls roughly 30% of the entire global market. For full-year 2008, it reported 73% of sales from the U.S., with the rest coming from overseas. The company has 7,500 customers worldwide, with no single customer purchase in excess of 5% sales volume, so it's a weak-dollar stock as well.

Revenue rose from $113 million in 2004 to $261 million in 2008, which represents a 46.19% CAGR. Net income went from $13 million in 2004 to $72 million in 2008, and gross margins expanded from 55.2% in 2004 to 71.0% in 2008 with estimates in the 71% to 73% range for full-year 2009.

The company operates three principal units: Galileo which is targeted at large hospitals, handles about 60 samples per hour and sells for $120,000 per unit, with annual reagent sales of roughly $140,000 per year. Echo, which is targeted at small hospitals with 50 to 400 bedside units, handles roughly half of the samples that the Galileo can handle and sells for $60,000 per machine, with annual reagent sales of roughly $40,000 per year. Finally, the next generation of Galileo, set to launch in the first quarter of 2010, will act as an additional catalyst for growth.

Just last week, Immucor signed an agreement with Alverno Clinical Laboratories, one of the largest regional integrated systems in the nation, servicing 27 hospitals in the Midwest. Under the agreement, Immucor will sell Alverno 24 Echo units and 2 Capture Workstations. Moreover, according to the agreement, Immucor will act as the primary source for Alverno’s blood bank reagent needs (this is where Immucor really makes its profit).

According to Alverno CEO Sam Terese , “We chose Immucor due to the exceptional functionality of the Echo instrument and its fit with LEAN operations as well as Immucor's commitment to improving transfusion medicine.”

This is a relatively large agreement given that the Department of Justice is looking into Immucor for possible price-fixing agreements with Johnson & Johnson (JNJ). Clearly, Alverno thinks the prices are more than fair.

Bottom line: Immucor will likely trade substantially higher on Monday night based on the following factors: raised EPS guidance, new buyback of common stock, the notion of a meaningless Department of Justice investigation, and reiteration of the company’s long-term growth prospects.

Other names appearing in this week’s Rocket Stocks portfolio include Goldman Sachs (GS), Bank of America (BAC), EnerSys (ENS) and Cyberonics (CYBX).