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10 Stocks JPMorgan Says May Rise Up to 58%

(Adds that Hess shares erased a loss for the year.)

BOSTON ( TheStreet) -- Now is a good time to pick up undervalued cyclical stocks as they are poised for double-digit gains this year, according to JPMorgan Chase (JPM) investment analysts.

The stock market has rallied 20% in the past four months and, historically, after a run like that, it takes a breather and remains in a trading range, as it has over the past five days, said the Feb. 2 research note from the investment bank.

"While we see a pause in the short term, followed by further gains, we believe this pause will be a time to add cyclical (stocks) exposure," it said.

The firm's stock selections will likely soon be picking up a tailwind as the government said today that the U.S. labor market grew by 243,000 jobs in January, the most since last spring, and the jobless rate fell to 8.3% from 8.5%, the lowest since February 2009.

That caught Wall Street flat-footed as the consensus was for a slowdown in job growth since the start the year and that unemployment would remain at 8.5%.

JPMorgan's 10 top picks have potential upside of 22% to 58%, according to its estimates. They include a range of companies, from trash collectors to insurance sellers.

JPMorgan said it remains optimistic for the market this year, giving a year-end target of 1,430 for the S&P 500, which represents an 8% upside to the current level. "We see many signs of a healthy market and likely further gains six and 12 months out."

The criteria used to select these stocks is that they should be in one of four sectors: energy, financials, industrials or materials; have a free cash flow yield of greater than 5%; be rated "overweight" by the firm; have a market value of at least $2 billion; and, finally, have at least a 15% potential upside to the firm's 12-month price target.

Here are JPMorgan's top 10 picks in inverse order of potential price upside based on the firm's 12-month price targets:
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