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The great thing about a market tumble like we've experienced is some great stocks get beaten to a pulp for no good reason. That means you can grab some great bargains that provide fantastic return potential. Here are two stocks I am confident will double from their current levels.

J.C. Penney is undergoing a major transition led by activist hedge fund investor Bill Ackman. Mr. Ackman has made some fantastic calls, including an enviable 15-bagger in General Growth Properties, in which he purchased a massive position when the company was nearly at zero, guided it through bankruptcy, and helped it emerge in great shape. He's got a knack for recognizing hidden value in real estate, and that's what initially attracted him to J.C. Penney. The company owns 41 million square feet of its retail space, its Texas-based HQ, and the 240 acres surrounding it. This may explain why Vornado Realty Trust also has a 9.9% stake in the company.

Mr. Ackman has stated that he feels the shares were undervalued at his buy-in price of about $20 on a trailing earnings basis. JCP has better cash flow than it appears because of pension expense (a non-bash charge), and because, "of its inexpensive valuation, strong brand name and assets, and well-deserved reputation for overseas sourcing, high-quality systems, and large in-house brands.”

Some naysayers may think J.C. Penney is out of touch with retailers, given the more flashy and sleek options of Costco, Target, and Walmart. That misses a wider picture; J.C. Penney has been in business for over 100 years, and $17 billion in annual sales is not chump change. The fact that Mr. Ackman helped bring aboard Ronald Johnson, former head of Apple's retail stores, is a signal that he will create big changes in J.C. Penney's in-store experience.

The stock had hit a high of almost $40. It's at $25, near Mr. Ackman's buy-in. It's time to buy.

One of the industries most badly hurt by the economy was the hospitality business. It wasn’t just that the recession got so bad that people pulled way back on their hotel stays. The real problem was that hotel companies were tremendously overleveraged. Without the revenue to support heavy debt service, almost every hotel company found itself in a bind. They couldn’t sell properties because there were no buyers. They couldn’t raise capital because the banks and equity markets were in a tailspin. That is, all except for one exceptional REIT, whose stock has already been a ten-bagger off its low, and has more room to run.

Ashford Hospitality Trust (NYSE:AHT) kept its head well above water over the past three years. The reasons for this go directly to level-headed, experienced management whose lifetime in the hotel business gave it the skill set to handle an unprecedented downturn in the hospitality industry.

Most people believe the hotel business is about providing the public with a nice product. That’s not true. The key to hospitality is management of capital.

Ashford took several steps to protect itself against a downturn back in 2008. After having switched most of its $2.8 billion in debt to a fixed rate under 6%, the company took advantage of historically low interest rates by shifting almost exclusively to LIBOR-based floating rate debt. By also engaging in some complex interest rate swaps, the company had been paying a mere 3% on its debt. Of all the things any business, especially a hotel company, could have done to survive this terrible recession, Ashford did it. They arranged the cost of their debt to be so low that they had no concerns about making global interest payments.

On top of this strategy, the company successfully negotiated refinancings and extensions on all of their debt since then, pushing it all forward. Management also presciently suspended the $0.84 annual dividend in late 2008, saving well over $100 million in cash at a time when it was needed most. Finally, the company ruthlessly cut expenses, and did it so successfully that these cuts more than offset revenue losses. In short, they stayed ahead of the game.

The company has been able to repurchase almost half of its outstanding common stock – 68 million shares, for an average price of $3.13. With the stock sitting at $7.00, management has seen a 130% gain on this investment. This includes the repurchase of about 12% of the outstanding Preferred D shares at $7, which was 70% below par value. Since the Preferred shares pay a $2.11 annual dividend, and the shares now trade at over $23, it again demonstrates the company’s brilliant financial maneuvering. Meanwhile, Ashford’s peers diluted their shareholders by an average of 75% in order to stay afloat.

Ashford is well-positioned compared to its peers. FelCor Lodging Trust (NYSE:FCH) still hasn't reinstated its dividend, it's dealing with $1.2 billion in debt and several consecutive quarters of barely any free cash flow. Meanwhile, Ashford's stock has cratered almost 50% from its high of $14 in May. Certainly there is concern about a double-dip recession, but we've already seen that management did everything right last time around. If the economy does sour, Ashford is in far better, and leaner, shape to survive. The stock has arguably been discounted for that possibility. Regardless of whether there's another recession, Ashford will return to its former high. In the meantime, investors are enjoying a 40 cent annual dividend, an almost 6% yield.

Disclosure: I am long JCP, AHT. I am long Ashford Preferred D, and have sold naked JCP September Puts