JP MORGAN: Here Are 21 Cheap Stocks For The End-Of-Year Rally

REUTERS/ Zoran Milich

JP Morgan's Tom Lee expects the S&P 500 to rally to at least 1,775 by the end of the year.

"Investor apprehension about this market continues to increase," says Lee. "It is the combination of fears that this was a 'false breakout' to new highs coupled with lingering concerns about the budget/debt ceiling showdown in the US and the possible resulting turmoil."

With this in mind, Lee identified 21 stocks with attractive valuations and high free cash flow. Each stock is rated overweight by JPM's analysts and offer at least 10% upside. They also have price/earnings ratios based on next-twelve month (NTM) earnings of under 12.8.

The most attractive stock on Lee's list offers a 58% return opportunity.