This week, the stock market has done what only a few were expecting it could do. The S&P 500 has hit another new all-time high, and while that is good for most stocks, not every one is made – or treated – equally. There are still some names in the market that have yet to catch up to the rest of the bullish momentum infecting the financial markets, and that is where investors can begin to generate alpha in the coming quarters.

But, more than just looking at discounted stocks is required. Investors have to combine a big gap between a stock’s price action and the fundamental prospects of that stock to place the odds in favor of considering a potential long position in the companies that satisfy this filter and selection criteria. That’s why today’s list is essential to consider moving forward, as it can provide investors with better odds of beating the market even if it retraces from its recent highs.

Making this list of combined factors set up for potential success are stocks like Sociedad Quimica y Minera de Chile (NYSE: SQM) operating as a basic materials play in the lithium industry, then investors can consider the potential tailwinds pushing the energy sector higher through shares of Transocean Ltd. (NYSE: RIG). Finally, there is a financial sector play that could see better price action from new mortgage demand in SoFi Technologies Inc. (NASDAQ: SOFI).

Exploring the Double-Digit Upside Potential of Sociedad Quimica Stock

Compared to the S&P 500, which is now at new all-time highs, Sociedad Quimica y Minera stock trades as low as 65% of its 52-week high, creating a massive gap between it and the broader market. To close such a big performance difference, investors should land on a strong enough catalyst or tailwind.

There are a few, but starting with the main one can be enough. Lithium demand across the globe is going to go up on a consensus, particularly as the rise of electric vehicle adoption and other new technologies needing batteries and other components that depend on lithium create more demand.

And who better to take advantage of this wave than the stock situated in the world’s largest lithium reserves, Chile? Because of this strategic positioning and secular tailwinds, Wall Street analysts have landed on a consensus price target of $50 a share, calling for a net upside of 14.6% from today’s price.

This target is nowhere near the stock’s previous high of $64 set at the end of 2023. However, other analysts at BMO Capital Markets placed – and kept – a price target of $65 a share on the stock to reflect a more realistic valuation, which calls for a higher upside of 49% to narrow the gap to the S&P 500.

How a New Oil Cycle Could Fuel Transocean Stock Growth

Warren Buffett has taken a bullish view on the energy sector after he bought up to 29% of Occidental Petroleum Co. (NYSE: OXY), but retail investors have a chance to position themselves at a better level of the oil value chain. That’s where Transocean stock comes into play.

This is a smaller company, with a market capitalization of $3.7 billion to stay away from the radar of mega investors like Warren Buffett. The stock trades at 54% of its 52-week high to offer enough of a gap against the S&P 500, and its business model is the one that gives it a better potential upside in the coming quarters.

Transocean is a rig and drilling equipment leasing company, and the lease rate is directly tied to the oil price at the origination time. That positions the stock first to generate higher earnings per share (EPS), especially now that the Federal Reserve (the Fed) interest rate cuts could spark new business activity and demand, which is historically good for oil.

Analysts think the stock could trade as high as $9 a share based on targets set by Susquehanna. To prove these valuations right, Transocean would need to rally by over 100% from where it trades today to offer investors both the catalyst and the room to deliver market-beating returns.

SoFi's Stock Outlook: Potential Mortgage Demand Drives Expectations for Higher EPS and Valuations

With lower interest rates also come lower mortgage rates, making them more affordable and accessible for would-be homebuyers waiting on the sidelines before potentially buying a new home. This could accelerate fee generation and profits for SoFi stock, a fact that Wall Street analysts already reflect in their forecasts.

SoFi is projected to deliver up to $0.10 in EPS for the next 12 months, a tenfold increase from today’s $0.01 EPS level. That should be enough to create momentum and get the stock closer to its highs now that it trades at only 76% of its 52-week high price.

Analysts at Needham & Co. decided to reiterate their “Buy” rating on SoFi stock, coupling it with a price target of $10 a share this time. They call for up to 15% upside from where it trades today. However, if the company does deliver on this tenfold EPS jump, analysts will likely have to come in with higher valuations to reflect the new reality.

Knowing that these trends are present for the stock today, bearish traders also decided to step away from some of their short positions lately, as reflected in the 2.9% decline in short interest for SoFi stock over the past month alone.