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After a remarkable two-year 50% return in the S&P 500, valuations and stock multiples have become stretched as opportunity isn't as apparent as in previous years. However, regardless of market multiples, there is always value to be found, or stocks that are yet to appreciate to levels of true worth. With that said, I am looking at four stocks in particular in four different industries that could not only see large gains in 2014, but perhaps even double.

Home Improvement

It's no secret that housing has been an emerging market in the last couple of years; in large part it has been driving gains in the overall market. Big companies such as Home Depot (NYSE:HD) have performed exceptionally well during this period, with gains of 100% in the last two years. Yet, Restoration Hardware (NYSE:RH) remains a company that has both industry-leading growth and industry-best value, along with a niche to serve the high-end customer.

As we've seen with the likes of Michael Kors and Coach in years past, once a brand becomes popular with high-end consumers, growth can be exceptional. This process is what we're seeing with Restoration Hardware, a company that grew 39% in its most recent quarter, and is on pace for full-year growth in excess of 32%. But what's really impressive about this growth is that almost all of it comes from comparable-store sales, approximately 29% in its last quarter.

With most of Restoration's growth coming from existing stores, investors know that more consumers are shopping at existing stores with heavier volume, which in turn boosts margins. In fact, operating income soared 299% in the company's last quarter.

With that said, growth alone does not necessarily mean that a stock could double; it must also have value. Thankfully, it is also cheap! Restoration Hardware is currently trading at 1.85 times sales, and with expected growth of 20.4% next year, the stock is trading at 1.33 times next year's sales. To put this in perspective, the S&P trades at 1.64 times sales, but clearly has far less growth.

However, if we look at one of Restoration's peers, such as Lumber Liquidators, it trades at 2.88 times sales and its growth is far less impressive, at 22.7% and 18% expected for 2013 and 2014 respectively. Thus, if we use forward expectations as a guide then Lumber Liquidators trades at 2.33 times future sales.

Therefore, with Restoration being cheaper and growing faster, there is reason to believe that it will outperform its peers and is worth the same, if not a higher, multiple than Lumber Liquidators. Hence, if Restoration trends to a level that is equal with Lumber Liquidators' multiple, it could hit $113.00. This is highly possible because, like I said, Restoration Hardware is the faster growing company. And since faster growth is usually rewarded with higher multiples, Restoration should be worth at least the same as Lumber Liquidators.

Although, one last fact to consider is that Restoration has beat analyst estimates in each quarter since its IPO, thus implying that earnings and sales could be higher than expected. With this in mind, it's rather plausible to suggest that at $65.00 Restoration Hardware could double in price if not get close over the next year.

Biotechnology

Two things determine a biotechnology company's upside: First, the number of catalysts in a particular time period, and second, a company's valuation. When a company has a good combination of multiple catalysts and a cheap valuation, a stock can soar in a single year.

This brings me to Lion Biotechnologies (OTCQB:LBIO), a rather new company that's still largely undiscovered, but has an eventful year planned for 2014. Lion Biotechnologies is the outcome of a merger with Genesis Biopharma. Impressive gains have already been seen since the merger, and 2014 should continue the that trend. In case you're unfamiliar with the company, it's taking tumor-infiltrating lymphocytes (TILs), which naturally fight cancers and are found within tumors, and then basically putting these cells "on steroids".

TILs alone within the body are not strong enough to fight cancers, but Lion removes TILs, engineers and expands the cells from millions to billions, and then re-administers these T-cells back into the body. In the treatment of metastatic melanoma, the results have been rather impressive. For one, TILs have been tested on 136 patients at four different trial sites; thus the data is robust. In this study, TILs have produced a 49% objective response rate, better than any known melanoma data, and 30% of patients have survived five years or more. Also, Lion is not only testing TILs alone as a single-treatment, but also in combination with Zelboraf, Yervoy, and anti-PD1s, giving the company multiple shots at success. Lion calls these programs "next-generation TILs".

Now that you know the story and familiarized with the data, let's look at the catalysts and what makes Lion a potential double in 2014. According to the company's latest presentation, it needed approximately $10 million of cash to fund operations through the fourth quarter of 2014; Lion completed private financing and now has nearly $24 million. Therefore, it has enough cash for two years, which eliminates the overhang or fear of short-term dilution.

Currently, Lion is an OTC stock. But according to the company's presentation, Lion will seek a listing on the NASDAQ in the first quarter of 2014. With a price of $9.00 and a market capitalization of $135 million, it is likely that Lion is uplisted early next year. Clearly, by going from OTC to the NASDAQ, Lion will be visible to a larger audience of shareholders; and if completed by the first quarter, it will also be eligible for fund inclusion and also indexes like the Russell. These combined will serve as stock moving catalysts in early 2014.

Lion will give an update on its Phase 2 trial in the first quarter and then plans to meet with the FDA to begin Phase 3 testing, both of which will be major catalysts. Also, the company will complete licenses and submit an IND for its next-generation TILs and present data on its study with Zelboraf. Collectively, these catalysts could create a nice boost for shares of Lion, especially with a $135 million market cap.

All catalysts and information was obtained from the company presentation, which can be found here.

With all things considered, TILs still have a lot to prove, but will get that chance starting next year. Additionally, investors should really like the amount of data that Lion has presented thus far, as most $135 million biotechnology companies have only early stage data, usually collected at one site. This data tends to be compared to historical averages. But the TILs data mirrors that of billion-dollar biotechs with multiple trial sites, robust patient data, and multiple years of follow-up analysis. Therefore, investors should really like what they see heading into 2014, as this little unknown biotech might very well be on everyone's radar by next year's end, with a steady dose of catalysts to push it significantly higher.

Non-Cyclical Consumer Goods

Next, let's look at one of the most shorted stocks in the market, SodaStream (NASDAQ:SODA). Here's a company that's constantly doubted, but continuously proves its naysayers to be wrong, despite little to no respect from the market.

SodaStream of course makes and sells home soda makers along with CO2 refills; bulls acknowledge the company's growth while bears believe the products are a fad. However, found in the middle of this tug-of-war is full-year growth of 29.6% in 2013, and expected growth of 19% for 2014.

Moreover, consumers aren't just buying these machines then tossing them in the closet, but are buying the CO2 refills, as CO2 sales growth outpaced new systems in the company's last quarter. In addition, SodaStream is still a relatively new company in the U.S.; it had sales of just $49.8 million in its last quarter, or 29% of total revenue in the Americas. Therefore, SodaStream still has a large global market to monetize, and remains very small relative to the massive beverage industry.

With that said and continued growth expected, value (like the others) is what can ultimately drive this stock higher. So, why not compare SodaStream to the ultimate beverage company, Coca-Cola (NYSE:KO)? The consensus amongst the 20 analysts covering Coke is for sales growth of 3.4% next year; this will be on top of a year (2013) where total sales are expected to decline 1.6% year-over-year.

Therefore, Coca-Cola is currently trading at 3.6 times 2014's expected sales; SodaStream is trading at 1.6 times forward revenue. Hence, with 10 times the growth, SodaStream trades at a discount of more than 50% to Coca-Cola! In a market where growth is often rewarded, SodaStream has somehow slipped through the cracks. And with 53.6% of its float being short, there is room for a massive short covering.

If we assume that SodaStream is deserving of the same multiple given to Coca-Cola, then SODA could more than double in 2014. However, investors must understand that SodaStream is in fact a wild card with high short interest, which has a tendency of keeping shares cheap for long periods of time. Then, if shorts cover and the stock breaks-out, these gains are often sudden and without warning. Thus, keep SodaStream on your radar and watch the stock closely, as it could double rather quickly.

Technology

In what I consider to be my most speculative selection, I like Advanced Micro Devices (NYSE:AMD) for 2014, but acknowledge that it's a risky choice.

AMD has had a pretty good year, trading with gains of 52% in 2013. However, the stock is considerably lower than it was three years ago, approximately 55% lower. The chip-making company has faced a number of hardships including double-digit unit declines in the PC market, lost market share to Intel in the PC market, and margin pressure from higher sales of gaming chips. Yet despite these problems, many of which persist, there's still a lot to like about AMD.

For one, the PC market is "stabilizing" in the words of Intel (NASDAQ:INTC). In Hewlett-Packard's last quarter, the company's PC sales declined just 2%, which is far less than what we've seen in previous years. Therefore, we have reason to believe that this market could be on the rise. And when we look throughout the space at companies like HP, Intel, Western Digital, and Seagate, many of the PC manufacturers and component makers have traded considerably higher, with the exception of AMD.

Next, AMD has a massive catalyst in the making that isn't really priced into its stock. This of course is its connection to both the PlayStation 4 and Xbox One, units that have sold 2.1 million and 2 million units respectively since launch. While we don't know precisely how much revenue AMD receives per unit sold, the research firm IHS estimates that AMD receives $110 per Xbox One unit for supplying CPU and GPUs. Thus, even if AMD receives just $70 for PS4 units, the company has already made more than $360 million in about a month since launch.

With trailing 12-month sales of $4.86 billion, game consoles will be a large piece of the AMD pie in 2014, and is one reason that analysts are expecting growth of 11.4% in 2014 or revenue of $5.85 billion. However, consider what's already been earned in console sales and the fact that console sales are expected to remain strong throughout 2014 due to shortages, a possible stabilization or growth in the PC market could drive this stock higher. With these things considered, doesn't an extra $600 million in sales - 2013 full-year estimates are $5.25 billion - seem a bit conservative?

My answer to that question is yes, and combined with its value might insinuate that shares of AMD could rally in 2014. For example, everyone is fully aware that AMD has lost market share in the low-end chip space to Intel, as Intel has a vast advantage in manufacturing/cost due to its scale. However, the market has priced the two stocks based on this fact, and AMD is significantly cheaper than Intel.

AMD trades at just 0.45 times 2014's estimated sales; Intel trades with a forward price/sales ratio of 2.35, and is expecting growth of just 1.2% next year. Therefore, AMD is not only expected to grow faster than Intel, but Intel is also priced five-times higher! Hence, it is not a stretch to suggest that AMD doubles in price, in which it would still be greatly cheaper than Intel. With that said, Intel, like Coca-Cola, has become one of those stocks that investors own and don't really know why. Investors know of the company, they know the company is large, and both pay great dividends. However, among peers there is far better short-term value, and one value is AMD.

Final Thoughts

One problem that readers might have with these four unusual selections is that sales have been one of the primary valuation tools used to identify or anticipate upside. Among retail investors, P/E ratios are often the most favorite metric of value. But in reality, P/E ratios are not a good indication of a company's size or its growth, as companies can grow net earnings through accounting, layoffs, etc., none of which show true improvements of a business.

Furthermore, companies at different stages of a business cycle will produce different margins, as a company like Coca-Cola is trying to maximize margins while SodaStream is more willing to reinvest earnings into growth. This conflict creates a valuation tool that is unreliable, while sales are a constant throughout the market, one where you can identify strengths and weaknesses in a particular industry. Therefore, when considering growth, valuation, and catalysts, each of the four companies presented have a strong opportunity to trade higher in 2014, if not double in valuation because of the rate at which growth is expected relative to valuation. This growth/valuation imbalance makes each of these stocks a must watch into 2014.

Source: 4 Stocks In 4 Industries That Could Make Significant Gains In 2014