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Are you looking for some high-octane performance in your portfolio? Want to try your hand at juicing up gains with a few NASDAQ rockets? Well then, you have come to the right place.

What happens when you combine earnings momentum with price momentum in the NASDAQ exchange? You get a small selection of rockets that are waiting for the proper conditions to lift off.

These screened stocks are a mix of three complimentary styles: CAN SLIM, fiscal momentum, and good old fashioned price momentum. We are scanning for aggressive growth, earnings surprises, upward revisions, and positive price performance. This is easy to search for as Portfolio123 allows you to easily combine ranking systems.

We hold these stocks for short periods of time – no more than one month of trading. I will show some historical back-testing of this strategy at the end of the article.

What sort of popping picks are coming up right now?

NASDAQ ROCKETS

Ticker

Company

Market Cap

Price

WFM

Whole Foods Market, Inc.

11995.76

68.33

ULTA

Ulta Salon, Cosmetics & Fragrance, Inc.

4139.9

68.16

PSMT

PriceSmart Inc.

2104.36

70.29

RDEN

Elizabeth Arden, Inc.

962.01

32.56

SCSS

Select Comfort Corporation

898.64

16.21

OPNT

OPNET Technologies Inc.

862.82

38.63

AKRX

Akorn, Inc.

798.76

8.33

EXLS

Exlservice Holdings, Inc.

784.54

25.37

MANH

Manhattan Associates, Inc.

778.05

37.73

PRIM

Primoris Services Corporation

612.72

12.26

HITK

Hi Tech Pharmacal Co. Inc.

429.5

32.01

KEYN

Keynote Systems Inc.

395.83

23.03

SUSS

Susser Holdings Corporation

346.08

20.05

HSTM

Healthstream Inc.

291.76

13.4

CBOU

Caribou Coffee Company, Inc.

269.62

12.71

DTLK

Datalink Corp.

155.31

9.11

CVV

CVD Equipment Corp.

91.94

15.73

What makes each of these stocks worthy of being on our NASDAQ rocket list? Let’s look at a few examples to see the typical profile:

WFM – A massive market cap food chain. Can this really be a rocket? First we have very high quarter over growth when comparing to one year ago. Net income was roughly 35% higher in the most recent quarter – and these results have been robust over the past 4 quarters. As well, the past 4 quarters have held an average surprise of 11%. As for price momentum, shares are up 77% over the past year. This company has had its share of volatility though. But with share prices down less than 7% from 52 week highs, this is one strong stock that fits our rocket profile.

CVV – What about our smallest market cap stock of less than 100 million? CVD Equipment Corp has seen jumping quarterly earnings. The past 6 quarters have seen a steady rise from negative 2 cents per share to 15 cents per share. The revenue doubled in the same amount of time. The most recent quarter carried a 55.6% surprise. Annual share prices are up 95% for the past year, 59% for the past half year, with a couple of wild bounces over the past 3 months. Strong support lies at $12.

PSMT – PriceSmart is another strong earner with profits rising over the last 4 quarters from 44 cents to 55 cents per share. The average earnings surprise has been 18%. Price is up 138% over the past year, 80% of the half year, and 18% for the quarter. As the share price toys with new 52 week highs past $75, this makes it a particularly exciting time. Consider buying on the potential breakout – or at $60 if for some reason the share prices retreat.

As you look over the rest of the picks, all of them have considerable strength in earnings, forecasts, and price performance – although not to the same degree. Remember that this is a short-term strategy where you hold a basket of stocks for one month – this is not a long-term 'buy and hold' technique. Has this historically been a sound strategy?

Back-testing Strategy Performance

The compound growth rate using this strategy with monthly portfolio re-balancing is 23%. Second, we test the system for robustness. We use 550 entry points over the past 10.5 years to buy and hold for one month. The average monthly gain across the past 10.5 years is 1.67% - or a non-compounded return of 20%.


(Click to enlarge)

If you isolate the stocks with a beta of less than 1.2, your annual gain jumps up to 24% as shown in the chart below.


(Click to enlarge)

As always, do your own due diligence and inspect each of these NASDAQ rocket stocks to ensure you are comfortable with the risk.

Source: These NASDAQ Rockets Should Be In Your Portfolio