James Altucher’s, TheStreet.com, weekly Rocket Picks:

a. U.S. Steel (X) is set to report earnings during the middle of this week. Despite the massive pullback in steel stocks, steel demand is extremely tight. Goldman Sachs raised its second-half 2008 earnings-per-share estimate, and it boosted its 2008 EPS estimate to $17.30 from $16.30. It is also raising 2009 and 2010 estimates as well as normalized EPS estimates to $28.25, $25 and $17.25, respectively, from $25, $22 and $16.

Chinese demand, coupled with the position of the U.S. now as a net-importer of steel, makes U.S. Steel a good earnings play.

Caraustar (CSAR) was punished last week after closing down its paperboard mill. The company has $250 million in debt, which becomes current this June and due one year from then. The company will essentially be forced to sell segments of itself to pay off the debt and avoid a going-concern notice from its auditors in early August.

The perception by the market is that Caraustar is close to going broke or will have to raise money at unfavorable terms. The reality is that the sum of the parts is worth a multiple of the current valuation. Sum of parts analyses shows that Caraustar is worth $3.

Play Caraustar for a snapback rally.

Gulfmark Offshore (GLF) reports this week as well, and there is opportunity to play this ahead of earnings. Analyst estimates on the company are ridiculously low. For starters, Gulfmark has exceeded analyst estimates the past seven quarters in a row by an average margin of 38.5%. The first quarter, which has historically been the weakest for the company (due to weather issues in the North Sea markets), was a huge upside surprise for the company. Analysts were looking for $1.10 a share for the quarter, and Gulfmark reported $1.40 a share. That’s a 27% earnings beat in what is historically the weakest period for the company.

Estimates for the second quarter are for $1.44, which is also ridiculously low. I am looking for $1.95 per share. I took analyst estimates of $1.44, and I added a 35% premium to those earnings. Why 35%? As previously stated, the company has historically exceeded analyst estimates by 38.5%, the second quarter is always strong, and the recent parabolic move in oil can only help the company.

Track James’ picks at:

http://trackthepros.com/categories.php?category_id=539

This stock has been unduly punished and is poised to snapback.