JPMorgan's 24 Stocks That Are More Attractive Than Apple

Story updated with Apple's stock hitting new record above $500 during Monday's trading session

BOSTON (TheStreet) -- The S&P 500 has rallied 6.6% in the first six weeks of the year, with Apple(AAPL) leading the charge. But not every stock in all leading industry has come along for the ride. That means investors can find opportunities in some of the laggards.

Professional investors, including TheStreet's Doug Kass, have joked that this is an "NBA" stock market: Nothing But Apple. That's because the maker of the iPhone and the iPad has seen its stock go parabolic, rising day after day to new all-time highs. Apple shares are up 23% this year and hit a record $503.83 on Monday, the first time the stock has crossed the $500 level.

Apple's revenue and earnings growth has disproportionately supported the S&P 500. In other words, Apple's amazing performance has masked the weaker overall performance of stocks.

JPMorgan strategist Thomas Lee, often criticized for being overly bullish on the prospects for stocks, says Apple's contribution is certainly impressive but isn't as extraordinary as it's made out to be. While he does note that Apple represented 79 cents of the $1.80 year-over-year increase in fourth-quarter S&P 500 profits, Lee also points out that, since 1990, top outliers have added 16% annually to earnings per share.

What JPMorgan's Lee is essentially saying is that Apple's huge contribution doesn't make the overall equity market less healthy. Instead, Lee argues that investors should start focusing on lagging stocks within leading sectors as the equity market continues to move higher.

For this, Lee set up a simple screen to find opportunities. His team looked for stocks in outperforming industries based on year-to-date price performance. Those stocks must be underperforming the S&P 500 this year, are rated "overweight" by JPMorgan's team, and there must be upside relative to the analysts' price targets.

Lee's suggestion, though, should be taken with a grain of salt. The only reference to Europe, which is still struggling with a massive debt crisis, in the report's 33 pages comes as Lee suggests the business cycle has the potential to accelerate as Europe exits a recession. The word "debt" doesn't show up once in Lee's research note.

For investors who think the market could still rebound and are looking for opportunities, Lee's screen returns 24 potential candidates. I've ranked the top 10 based on the spread between the firm's price target and where the stock trades currently, which are detailed below and on the following pages.

The 14 other stocks making Lee's list are FMC Technologies(FTI), International Flavors & Fragrances(IFF), Boeing(BA), Raytheon(RTN), Tyco(TYC), Time Warner(TWX) and Omnicom Group(OMC).

The others are McGraw-Hill(MHP), Varian Medical(VAR), Aon(AON), Ace(ACE), Boston Properties(BXP), Simon Property(SPG) and KLA-Tencor(KLAC).

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10. Amazon.com(AMZN)

Company Profile: Amazon is the largest Internet retailer. The company also produces the popular Kindle eBook reader and the Kindle Fire tablet.

Share Price: $185.48

Potential Upside: 13% based on a price target of $210

On Feb. 1, after Amazon reported disappointing results for the fourth quarter, JPMorgan analyst Doug Anmuth cut his price target for Amazon to $210 from $235, although he maintained the firm's "overweight" rating on the stock.

"We believe Amazon's [gross merchandise value] growth likely remains strong and is growing faster than revenue, and that Amazon's shift toward third-party is at least temporarily (but perhaps longer) depressing revenue and raising margins," Anmuth wrote. "We think we could see some further weakness in Amazon shares in the very near term, but we'd view further pull-backs as buying opportunities."