These 2 picks are on my 2023 stocks to buy list!

When looking for good stocks to buy, one of the first places I look is what I already have in my portfolio. It has taken quite a beating over the past 12 months, with the 2022 stock market correction not giving a quarter.

But basic business remains basic. And while the short term is still filled with uncertainty and volatility, in the long term, I remain confident.

However, while many of my positions have started to recover, there are still some trades that are below their intrinsic value. And it provides a new upward momentum that is seen in the FTSE 100 and FTSE 250 continue, the window of opportunity to capitalize on this potential offer may close.

So let’s explore two companies in my portfolio that I would like to buy more of.

The beaten stock

In my experience, some of the best investment deals are businesses that are judged by investors. That’s the category I’m interested in XP Power (LSE:XPP) in.

As a quick reminder, the company designs and manufactures electronic components for machines in the manufacturing, healthcare, and semiconductor industries. Investors may be aware of supply chain disruptions starting in 2020.

However, the stock fell from grace after the company was hit with a $40m legal penalty for stealing trade secrets. Needless to say, that’s not good. And, not surprisingly, the stock price fell off the cliff.

From a financial perspective, the group has enough capital to pay the fine without damaging its balance sheet. But what about reputation damage? Well, looking at the latest results, it seems that customers are not bothered.

The order book continues to grow, and with supply chain disruptions resolved, XP Power is clearing its backlog. So, profits again increase at a double rate.

Despite the impressive comeback performance, the Shares continue to trade more than 40% lower than 12 months ago. That’s why I believe XP Power is an opportunity to buy when there is blood on the road. And why I think it could be one of the best stocks to buy and hold in 2023.

Potential tailwind

With inflation affecting household budgets, Howden Joinery Group (LSE:HWDN) may seem like an odd choice in 2023. As a quick overview, the company designs and sells fitted kitchens directly with builders in the UK, Ireland and France.

It is hardly the most exciting company. But it has proven to be extremely profitable over the years, rewarding patient investors with steady dividends and buybacks.

Most of the company’s cash flow comes from households looking to renovate their kitchens. With consumers looking to cut back on unnecessary spending, due to the cost of living crisis, home renovations may be delayed. However, that doesn’t seem to be the case.

Its latest earnings report announced double-digit revenue growth, with pre-tax profit expected to beat analysts’ forecasts. What’s more, performance can be tuned to speed it up.

With housing becoming more expensive, a new tailwind may begin. As families are more likely to stay longer, the demand for renovations will increase.

And while supply chain disruption continues to be a threat, discount pricing makes it a risk worth taking, in my opinion. That’s why Howden Joinery is second on the buy list.