3 cheap stocks to buy now to fast-track my year

January can feel like a long, slow month. And it will be next year, especially in terms of the stock market.

So if I can find some cheap stocks to buy in January that can add to 2023, I’m eager to take action. After doing the work, these are the stock options I would like to buy for that purpose.

Build strong growth 2022

Investec (LSE:INVP) is a FTSE 250 registered bank that may not be one of the top tier UK names, but it is still a company that can offer me an attractive return. The price-to-earnings ratio (P/E) is at 9.63, below the usual ‘fair value’ number of 10. What makes this ratio figure even more impressive is that the stock price has risen by almost 32% in the past year. .

The company has performed well, with interim results to the end of September showing a 25.1% growth in earnings per share compared to the same period last year. With the dividend per share also increased by 22.7%, I can earn income from this dividend stock.

However, funds under management fell by 7.6%. I understand that the volatility in the financial markets has caused some money to come out of places like Investec, but we cannot continue to see an outflow of investors in 2023.

Buy in less

Next is Bridgepoint Group (LSE: BPT). The business specializes in private equity and private credit investment, with over £32bn of assets under management. In contrast to Investec, the share price for Bridgepoint has fallen by 60% in the past year.

Companies have found it challenging to exit privately held investments recently, given the bleak economic outlook. There is also the risk of being able to sell the investment at a lower price. After all, this is a private company and it is not as simple as selling shares in a listed business.

However, I think the fall in stock prices has been too great and reflects fear rather than rational decision making. In its November update, Bridgepoint said it was on track to meet its full-year targets. On this basis, I think it is a good buy now. It is trading near its lowest level since going public in 2021.

Stocks to buy for lower inflation

Finally, the last pick for good value stocks Tesco (LSE: TSCO). With a P/E ratio of 10.75, it is the only ‘fair value’ on the scale. But I show it looks cheap when I consider the outlook.

The stock price has fallen 20% over the past year as wholesale inflation rises and rises. But the latest November figures showed inflation fell for the first time in 21 months. Granted, it’s only down 0.1%, but at least it’s up.

I think we are close to peak inflation in the UK. If I’m right and inflation falls later this year, people will increase their spending at Tesco because they have more money. While it won’t be a perfect correlation, slowing inflation should allow stocks to regain some/most of the 20% decline caused by inflation starting in 2022.

I think the above stocks may outperform in 2023 and therefore I will buy them all soon.