After a strong 2013 where the S&P 500 was up almost 30%, you would think that most stocks would be close to being fully priced. That’s not what Thomas Lee, the chief equity strategist at J.P. Morgan thinks. In a new research report, the J.P. Morgan team remains confident that U.S. economic momentum is strengthening, and they continue to expect incoming data over the next few months to validate that trend. They also think that investors remain positive on equities in general, but point out that retail ownership of stocks is still low.

While margin debt levels are raising some eyebrows on Wall Street, the J.P. Morgan analysts are not concerned. They are focused on the quartile of stocks that are forecasting earnings growth of 11% or greater and have a median price-to-earnings (P/E) ratio of only 11.8. This compares with the broad market, which is trading at 16.5 times earnings, which is near historical highs. The analysts have circled some top stocks to buy in this value P/E area.

Here are the stocks to buy that have not only the lowest P/E, they also have potential upside to the J.P. Morgan price targets.

Aetna Inc. (NYSE: AET) stock climbed to a new all-time high as a Credit Suisse analyst upgraded the health insurer’s rating, saying the Coventry Health Care acquisition provides a bit of a cushion as uncertainty surrounds health care reform. Aetna completed its $5.7 billion acquisition of Coventry Health Care in May. Investors are paid a 1.3% dividend. The J.P. Morgan price target for the stock is $74. The Thomson/First Call estimate is posted at $75.05. Aetna closed Wednesday at $71.40.

Carlyle Group L.P. (NASDAQ: CG) is a top name to buy in the alternative asset managers for 2014. With a ton of cash pouring in and a decided lack in big buyout candidates, the firm is applying the expertise in smaller deals it may not have looked at in the past. With a multi-fund model and a go-anywhere global footprint, this is yet another top stock for investors to participate in a multitude of deals. Investors are paid a 1.8% dividend. The J.P. Morgan price target for the stock is $39. The consensus print is $36.39. Carlyle closed Wednesday at $36.99.

CommScope Holding Co. Inc. (NASDAQ: COMM) provides connectivity and infrastructure solutions for wireless, business enterprise and residential broadband networks in the United States, Europe, the Middle East, Africa, the Asia Pacific, Central and Latin America, and Canada. The company operates in three segments: Wireless, Enterprise and Broadband. The company had a successful 2013 IPO and has rolled over recently, providing investors a solid entry point. The J.P. Morgan price target is posted at $24, and the consensus is at $20.50. The stock closed Wednesday at $18.43.

Ensco PLC (NYSE: ESV) is a top energy name that fits the bill. The company recently took delivery of ENSCO 121, the second of four ultra-premium harsh environment jackup rigs in its ENSCO 120 Series. ENSCO 121 is an enhanced version of Keppel’s proprietary KFELS Super A Class design. The rig has been contracted in the North Sea at a day rate of approximately $230,000. Shareholders are paid an outstanding 5.3% dividend. The J.P. Morgan price target stands at $68, and the consensus is lower at $63.22. Ensco closed Wednesday at $55.62.

International Paper Co. (NYSE: IP) was a recent addition in a big way to the portfolio of George Soros. International Paper’s last quarterly earnings report topped expectations due to growth in packaging. The company upped its dividend 17% last year and plans to buy back $1.5 billion worth of its shares over the next few years. Investors are paid a solid 2.9% dividend. The J.P. Morgan price target for the venerable company is $50. The consensus price target for the stock is $54.59. The stock ended Wednesday at $48.84.

LyondellBasell Industries N.V. (NYSE: LYB) is a top commodity and chemical name to buy on the J.P. Morgan list. The company manufactures and sells chemicals and polymers, refines crude oil, produces gasoline blending components and develops and licenses technologies for the production of polymers. Investors receive a very solid 3.0% dividend from the European giant. The J.P. Morgan price target is set at $83, and the consensus number is at $84.55. Lyondell closed Wednesday at $82.75.

Meritage Home Corp. (NYSE: MTH) reported a 44% increase in revenue from home closings last quarter, with EPS up 421% for the third quarter, and an astounding 583% so far in 2013. These metrics are largely being driven by a 22% increase in the average home sales price, as the company continues to grow its sales mix in the upscale market. J.P. Morgan has a $56 price target, and the consensus figure is posted at $49.92. Meritage closed Wednesday at $45.38.

MetLife Inc. (NYSE: MET) is a top insurance and financial name to buy for 2014. The company provides insurance, annuities and employee benefit programs in the United States, Japan, Latin America, the Middle East, Asia and Europe. With a familiar brand and solid revenue growth, the company may be a solid name for any portfolio. Investors are paid a 2.0% dividend. The J.P. Morgan price objective $58, and the consensus is posted at $59.33. MetLife closed Wednesday at $54.32.

Two Harbors Investment Corp. (NYSE: TWO) is one of the many battered mortgage real estate investment trusts that were hit hard when interest rates started to rise last May. The J.P. Morgan analysts think that its diversified portfolio and move to a more defensive posture on rates makes it a top name to buy. Investors are paid an outstanding 10.5% dividend. The J.P. Morgan price target for the stock is $10, and the consensus was not posted. Two Harbors closed Wednesday at $9.85.

Wells Fargo & Co. (NYSE: WFC) makes the list and is the leader in the home mortgage category among U.S. banks. With risk moving out of the category and rates going higher, banks like Wells Fargo are starting to offer 5% down mortgages to entice buyers. The company recently reported solid fourth-quarter earnings. It pays shareholders a 2.6% dividend. The J.P. Morgan price target is set at $51. The consensus price target is $47.93. The bank closed Wednesday at $46.40.

These J.P. Morgan stock picks represent a class of names with growing earnings and very low earnings multiples. J.P. Morgan, like most of the firms we cover, is positive on this year and estimated the market will rise 12%. With the prospect of a strong correction in what may be a contentious election year, these low P/E stocks may be a perfect portfolio addition.

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