Bull Market

Source: flickr user James Manners

The stock market has been in a slump for the past month or so, but market weakness can create opportunities to get into beaten-down stocks at bargain prices. We asked three of our analysts to talk about stocks that could possibly double within the next year, and here are their favorites.

Selena Maranjian: Shares of online travel giant Priceline (NASDAQ:PCLN) have sunk about 14% from their 52-week high, but the company has plenty of growth drivers to help it recover.

In Priceline's last quarter, gross travel bookings, the total dollar value of travel services purchased by customers, rose 12% year over year, totaling $13.8 billion. The company produced most of its gross bookings in international markets, and removing the effect of the strong U.S. dollar, gross bookings grew even more briskly, by 26%. Growth in the U.S. was disappointing, though, with U.S. bookings only rising 2.1%.

Priceline is aggressively investing in marketing and advertising, and this is taking its toll on profitability. Total operating expenses grew 28% year over year, increasing at a faster rate than revenue and thereby eroding its profit margins. That's only a short-term issue, though, as these investments can drive revenue growth in the future -- and can help Priceline battle competitors -- such as Amazon.com, which is entering the travel arena.

Priceline is working to expand internationally, recently making its first investment in Brazil with a $60-million stake in a hotel-booking start-up there. Another recent deal is with OnStar, to permit drivers to book hotel rooms while on the road.

Look at the big picture, and you'll see Priceline growing at a vigorous rate, while remaining a remarkably profitable business, with net profit margins near or above 20% in recent years. Its brands include Booking.com, priceline.com, agoda.com, KAYAK, rentalcars.com, and OpenTable. Short-term investors might see the stock double in the coming year, but short-term performance is hard to predict. Long-term investors, though, stand a good chance of being rewarded very well by Priceline.

Matt Frankel: One stock that could easily double if things go its way is Etsy (NASDAQ:ETSY), which has been beaten down since its April IPO. After climbing from its IPO price of $16 to more than $30 during its first trading day, Etsy has steadily fallen, now trading for about $13 per share.

ETSY Chart

The company's latest earnings report showed decelerating growth (28% year-over-year sales growth vs. 46% in 2014) and higher spending (Etsy is aggressively spending money on marketing efforts). However, investors' top concern is perhaps Amazon's new "Handmade" marketplace. This is clearly meant as direct competition to Etsy, and had been the cause of several analyst downgrades and negative articles about the company.

While there is no debating Amazon's power, I think the fears are overblown in this case. First, it looks like Etsy will be cheaper for most sellers. Currently, Etsy charges sellers a $0.20 listing fee, plus 3.5% of each transaction. Amazon Handmade charges a flat fee of 12%, and bear in mind that this is a "promotional" rate, and could be significantly higher after the initial period expires in August 2016.

Plus, there is no reason the two sites can't successfully co-exist. There is nothing preventing sellers from listing on both websites, similarly to how many small businesses list items on both Amazon and eBay presently.

The number of active Etsy sellers grew by 26% in the past year, and the number of buyers is growing even faster. And, the company plans to ramp up hiring in the coming quarters and increase its investment in marketing even further. So, while Etsy isn't profitable yet, it is growing at a rapid pace and could reward investors who have the risk tolerance and patience to ride out any "growing pains."

Jason Hall: Lumber Liquidators' (NYSE:LL) stock has been crushed over the past year-plus. Since topping out at around $110 in early 2014, it's fallen to $19 and change on bad news and scandal ranging from slowing sales growth, to allegations of buying illegally harvested wood, to the more recent allegations that its Chinese-made laminate products contain potentially harmful levels of formaldehyde.

In short, investors have fled this stock like it had a combination of Ebola and swine flu.

And the company remains exposed. The Department of Justice is proceeding with charges under the Lacey Act related to the illegally harvested hardwood, which could cost tens of millions of dollars in fines. The company says it has fixed its sourcing processes, but fines are a foregone conclusion at this point.

The bigger risk concerns the formaldehyde allegations. While the California Air Resources Board -- the only government agency that regulates formaldehyde in consumer products -- has remained closed-lipped about the issue (indicating it's satisfied the company is meeting its requirements), the U.S. Consumer Products Safety Commission announced that it will conduct tests. If it finds the products produce potentially harmful levels of formaldehyde emissions, the financial and PR blow could be devastating.

The CPSC announcement said it will use "real-world" testing methods, which supports Lumber Liquidators' position that accusers haven't used proper testing methods. If the company has been straight with its claims, the CPSC testing could actually lead to vindication.

There remains risk. But even a glimmer of positive news is likely to send the stock shooting back up, and in a very big way. 

Jason Hall owns shares of Amazon.com and Lumber Liquidators. Matthew Frankel owns shares of eBay. Selena Maranjian owns shares of Amazon.com, eBay, and Priceline Group. The Motley Fool recommends Amazon.com, eBay, Lumber Liquidators, and Priceline Group. The Motley Fool owns shares of Amazon.com, eBay, Etsy,, Lumber Liquidators, and Priceline Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.