5 Rocket Stocks to Buy After the Storm
BALTIMORE ( Stockpickr) -- Mother Nature just might have the best Halloween costume of all this week: the so-dubbed "Frankenstorm" that's ravaged the Eastern seaboard this week. The storm has had a real impact on markets, with Hurricane Sandy keeping U.S. stock and options markets closed until today.
It's the first time in 27 years that NYSE opted to board up its trading floor ahead of a storm. The last was Hurricane Gloria back in 1985.
With markets open once again, we're focusing on five new names that should be able to benefit in spite of the storm: a new handful 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 174 weeks, our weekly list of five plays has outperformed the S&P 500 by 72.68%.
Without further ado, here's a look at this week's Rocket Stocks . BlackRock
Investment management giant BlackRock (BLK) is up first this week. With close to $3.7 trillion in assets under management, BlackRock is by far the biggest manager in the world. It's not just size that matters, where the money's stashed is also important, and BLK's allocations are attractive.
Currently, less than half of BLK's funds are in equities, around a third is in fixed income, and the rest sits in alternatives. With investors still feeling squeamish about stocks, that limited equity allocation is nice. And since BlackRock got its start as a fixed income shop, it's been able to take full advantage of the treasury rally that's been roaring as risk-averse investors poured all of their assets into risk-free government debt.
Part of the trick is going to be in convincing investors to keep their money at BlackRock when they eventually make the move over to equities again. With inflation outpacing the paltry return on Treasuries right now, it's just a matter of time . The fact that BLK gets most of its assets from other institutions should help keep those assets in-house; the group that tends to be less fickle and more willing to stay in a fund than nonprofessionals.
That said, if BlackRock is willing to court more retail investors, it'll have a big growth avenue ahead of it in the next few years. We're betting on shares of this asset manager this week.