When it comes to picking stocks with substantial upside potential in 2014, I am looking for companies that have some blemishes that I think will clear-up as we move through the year, says tech specialist Paul McWilliams. Rather than focus on a single stock, the editor of Next Inning picks a package of three favorites.

Marvell (MRVL) is clearly carrying a big zit on its forehead from the ongoing legal battle with Carnigie Mellon University (CMU). A jury awarded CMU damages slightly in excess of $1B, and the judge could triple that.

Naturally, MRVL will appeal, and given the data I've read, I think its chances of substantially lowering the award, if not outright winning, are good.

As I see it, even if MRVL is forced to cough up a cool billion bucks, the stock is still worth around $17. However, if the award is significantly lowered, or if MRVL wins on appeal, I think it will move into the $20s.

Finisar (FNSR) is the world leader in the fiber optics markets it addresses, and, by far, the market share leader in enterprise fiber optics. While some investors have been led to believe silicon-photonics technology will soon disrupt FNSR's enterprise fiber optics business, I don't see that happening.

Sure, silicon-photonics has advantages, but it does not compete favorably with Finisar's transceiver technology on power consumption, price, or size.

I think Finisar provides investors with the most attractive balance of value and growth potential available in the fiber optics sector. While it may take Wall Street a few more consensus-topping quarters to get the message, I think the stock is worth something in the low to mid-$30s.

QuickLogic (QUIK) has posted exceptional new product growth in 2013, and now claims Samsung as a direct customer.

While I think the drivers that delivered the goods in 2013, will continue to work to QuickLogic's favor in 2014, the real kicker in this equation is, QuickLogic is the only company in the world that has developed a sensor hub that is low enough power to deliver the vast benefits we can realize from Always-on Context Aware sensor fusion.

I realize that is a mouthful of industry buzz words, but curious investors should learn about this new emerging market before it becomes headline news.

Since QuickLogic is tiny, and currently unprofitable, it's tough to model an upside potential using fundamental data. However, if it is successful in the smartphone sensor hub market, I think the upside potential is very significant.

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