5 Rocket Stocks to Buy Now

BALTIMORE (Stockpickr) -- Markets are firing on all cylinders again, now that the disastrous scenario of a government default is off the table and federal employees are back at work. There's a lot of runway for stocks to spool up their engines in the final months of 2013.

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This year's rally has probably been the most-hated ascent for stocks in most investors' memories. But anyone who avoided equities has gotten punished with colossal underperformance. After all, the S&P 500 is up more than 22% since the calendar flipped over to January.

Last week alone, the S&P cranked out 2.42% gains.

So as even the most skeptical market participants begin to grudgingly chase performance in 2013's final quarter, the big indices should get a nice tailwind to end the year. To make the most of it, we're turning to a new set of Rocket Stocks worth buying this week.

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 219 weeks, our weekly list of five plays has outperformed the S&P 500 by 89.6%.

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Without further ado, here's a look at this week's Rocket Stocks.

Visa

As impressive as the market's climb has been this year, payment network Visa (V) has managed to do one better. Shares of the incumbent payment processor have rallied more than 32% since the first trading session of 2013. And a breakout to new all-time highs on Friday looks good for shares in the months ahead.

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Visa is the top dog in the payment card business. Its logo is printed on around two-thirds of the world's credit and debit cards, giving it a serious positive feedback loop when it comes to courting customers and merchants. Consumers see Visa's network accepted everywhere they shop, so they're more likely to get a Visa-braded card, and merchants see more customers whip out a Visa than any other brand, so they're more willing to keep accepting Visa. That makes the firm's network extremely hard to replicate for rival networks unless they're willing to take a huge haircut on the fees they charge.

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During the Great Recession, Visa benefited in a big way from its lack of exposure to consumer credit. After all, it's just the payment network, not the card issuer. So when consumers shredded their credit cards in favor of debit, they still put dollar volume through Visa's network. With the dominant share of the business, Visa is well-positioned to capitalize on the growth of the electronic payments business. As more consumers worldwide stop carrying cash or checks in favor of more-convenient payment options, a rising tide should lift all ships in the sector -- just some more than others.

Celgene

Biopharma firm Celgene (CELG) is another stock that's posted some blockbuster performance numbers in 2013; this $66 billion drug maker has seen its shares more than double since the start of the year. But despite that breakneck performance, CELG is well-positioned for more upside before the year is over.

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Celgene is a biopharmaceutical firm that focuses on cancer and immunology therapies. The firm's drug portfolio includes established niche names such as Revlimid, Thalomid and Vidaza alongside newer offerings such as Pomalyst. Celgene's relatively narrow focus has been a major benefit for the firm -- it doesn't stray too far from its core competency, and as a result, the firm has been able to come up with new indications for existing therapies. Taking Revlimid to Europe should be a major revenue driver for CELG in the next couple of years despite speed bumps in getting approval; already, the drug is closing in on the $4 billion sales level this year in the U.S.

With more than $2 billion in annual free cash flow generation, Celgene currently sports a balance sheet that's net cash positive to the tune of half a billion dollars -- that's in spite of a growth-by-acquisition strategy that's added considerable new drugs to the firm's pipeline in recent years.

With rising analyst sentiment in Celgene this week, we're betting on shares.

Time Warner

After splitting off its cable arm and AOL (AOL) in 2009, entertainment giant Time Warner (TWX) is looking very well-positioned for the new ways fans consume content. Time Warner is a TV and film powerhouse, with television networks such as HBO, CNN and TNT under its belt -- as well as the largest film studio in the world between Warner Bros. and New Line Cinema. That means that TWX has a portfolio of content and intellectual property that few can rival.

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TWX owns much of the must-watch TV on the air today. And it's been parlaying that expertise into a revamped model at news giant CNN in an attempt to turn around a long-term viewership slump. Its film units provide stellar vertical integration; because the firm can license its own library to screen on HBO or TNT, it's able to snag viewers (and advertising or subscription dollars) for less money. Now, as cable networks and online services such as Netflix (NFLX) begin paying to access Time Warner's legacy content, the firm should be able to monetize its portfolio more than ever before.

The final step in Time Warner's puzzle is to get rid of its namesake magazine unit next year. Time Inc.'s magazine business has been an earnings drag for years now, and the decision to spin off magazines doesn't really come with any drawbacks for shareholders. The strength of Time's magazine brands should unlock some value for shareholders, even if the business is stagnant.

Aflac

Aflac (AFL) may be best-known for its series of ads featuring an unlucky cartoon duck, but this $31 billion supplemental insurance giant is no joke. Aflac is one of the biggest supplemental insurers in the world, with a lucrative business in the U.S. and Japan. Even though insurance products are largely commoditized these days, Aflac's brand success gives it fatter margins than the norm.

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In a nutshell, Aflac's policies pay out predetermined cash benefits if customers meet a predetermined condition -- normally contracting a disease or being involved in an accident. These sorts of loss-of-income policies are proving popular in the wake of the Great Recession as consumers look for way to protect income. And since they're deducted directly from paychecks in many cases, there's no sticker shock effect from seeing money go out each month.

Japan is, by far, Aflac's most important market. The country makes up around 80% of the firm's income, the result of a sticker customer base and a culture that's more eager to offset income risks. A solid balance sheet position and solid relative strength in 2013 make this Rocket Stock a good bet for the final quarter of the year.

Ecolab

You're probably already familiar with cleaning and sanitation product maker Ecolab (ECL), even if you don't already realize it. Ecolab is one of the biggest names in commercial cleaning products, which means that if you've ever eaten at a restaurant or stayed in a hotel, there's a good chance that ECL's offerings were used on site.

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Institutional and commercial sanitation is an afterthought for many consumers, but it's paramount for businesses. Because businesses stake their reputations on cleanliness, they're less likely to switch to unfamiliar rivals -- especially because of the relatively trivial costs of Ecolab's offerings and the dispensing hardware that many facilities already have installed. The firm's huge commission-based sales force is the lynchpin of Ecolab's success.

Ecolab ramped up its debt load to purchase water treatment specialist Nalco in 2011 and chemical maker Champion Technologies last year, but balance sheet leverage is still pretty reasonable right now. Analyst are getting bullish on Ecolab again this week -- and so are we.

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, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji