By Jonas Elmerraji
Posted on Nov. 2, 2009
Last week was brutal for investors. With four of the last five trading sessions ending in the red, the S&P 500 index closed 4% lower on Friday than its open last Monday. But things are turning up this week, with markets opening higher on hopes of a November bounce.
Right now is a very key time for the market. With the pullback we’ve had in recent weeks and with aggregate share prices nearing their 50-day moving averages, we could be witnessing a very significant bounce over the next couple of trading sessions. If not, the markets could be set to fall even further.
With that in mind, Stockpickr presents another installment of its weekly Rocket Stocks list. These beaten-down stocks with near-term growth catalysts and long-term growth potential may be among the best-positioned for a bad market, but they’re far from immune to it. And while our picks closed way ahead of the S&P 500, our average return for the week was -1.55%.
That means that over the course of the last 15 weeks, Rocket Stocks have outperformed the S&P 500 by 31.4%.
First, let’s take a look at how last week’s Rocket Stocks plays fared.
Pulling top returns last week was NutriSystem (NTRI), the weight-management company that counts Don Shula and Dan Marino among its spokespeople. The stock nailed earnings numbers last week, bringing in 10.13%. Amazon.com (AMZN) also managed to fare well and outperform the S&P 500 in the week after its solid earnings release. Shares rose 0.27% in the week.
Performing worse last week were Chevron (CVX), which dropped 0.18%, America Movil (AMX), which dropped 4.77% last week, and Wynn Resorts (WYNN), which fell 13.2% on lower quarterly profits.
Now on to this week’s Rocket Stocks.
Amazon.com showed us that solid earnings will continue to be paraded after the fact in this market. That’s something that we’re hoping to capitalize on this week with shares of Ford (F). The auto giant released its third-quarter earnings pre-market on Monday, delivering an unexpected profit of $997 million and announcing that it expects to continue to be profitable in its 2011 fiscal year.
That’s very good news for investors who have already picked up shares of the best-in-breed Detroit automaker, and it should also be good for investors who are interested in riding the wave of optimism this week.
With an increased dividend last week in spite of a rough-and-tumble market, payment facilitator Visa (V) should look like a very attractive intraweek investment for investors who are ready to see a bounce. The company, whose branded credit and debit cards are accepted nearly everywhere, gets a cut of sales that go through its network without being exposed to the same credit risk that the card issuers are subject to.
For the first time, debit card usage surpassed credit cards early this summer, bringing some to question whether the switch, which has debit transactions now taking up 60% of card usage, will hurt the likes of Mastercard (MA) and American Express (AXP). But for Visa, whose logo is on the majority of debit cards issued right now, the switch remains good for the company’s bottom line.
For more stocks that made this week's cut, including Align Technology (ALGN) and Arkansas Best (ABFS), check out the Rocket Stocks portfolio at Stockpickr.
At the time of publication, author had no positions in any 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.
