Image source: Getty Images
When looking for good stocks to buy, one of the first places I start looking is what’s already in my portfolio. It has taken quite a beating in the last 12 months, with the 2022 stock market correction relentlessly.
But the underlying businesses remain fundamentally sound. And while the short term is still full of uncertainty and volatility, in the longer term I remain confident.
However, while many of my positions have already started to recover, there are still several trading below their estimated intrinsic value. And providing the recent bullish momentum seen in the FTSE 100 and FTSE 250 continues, the window of opportunity to capitalize on these potential offers may be closing.
So let’s explore two companies in my portfolio that I’m considering buying more of.
a stock hit
In my experience, some of the best investment deals are companies that are overly punished by investors. That is a category I would place XP Power (LSE:XPP) in.
As a quick reminder, the firm designs and manufactures electronic components for machines in the semiconductor manufacturing, healthcare, and industrial industries. Investors were understandably nervous about supply chain disruptions that began in 2020.
However, this action fell out of favor after the company was slapped in the face with a Legal penalty of $40 million for stealing trade secrets. Needless to say, that’s not good. And, unsurprisingly, the stock price fell off a cliff.
From a financial perspective, the group has enough capital to pay the fine without crippling its balance sheet. But what about reputational damage? Well, looking at the latest results, it seems that the customers are not too upset.
The order book continues to grow and with the supply chain disruptions resolved, XP Power is eliminating its order book. As such, revenue is once again increasing at double-digit rates.
Despite the impressive recovery in performance, shares continue to trade more than 40% lower than 12 months ago. That’s why I think XP Power is an opportunity to buy while there’s blood on the street. And why I think it could be one of the best stocks to buy and hold in 2023.
potential tailwind
With inflation affecting family budgets, Howden Joinery Group (LSE:HWDN) may seem like an odd choice in 2023. As a quick recap, the firm designs and sells fitted kitchens working directly with builders in the UK, Ireland and France.
Not the most exciting undertaking. But it has proven immensely lucrative over the years, rewarding patient investors with ever-increasing dividends and buybacks.
Most of the company’s cash flow comes from households looking to renovate their kitchens. With consumers looking to cut unnecessary spending due to the cost of living crisis, it would make sense for home renovations to be put on hold. And yet that doesn’t seem to be happening.
The latest earnings report announced double-digit revenue growth, with pre-tax earnings expected to beat analysts’ forecasts. Also, performance can be configured to throttle.
With housing becoming more expensive, a new tailwind may start to blow. As families are more likely to stay longer, demand for renovation is likely to increase in the long run.
And while supply chain disruptions continue to pose a threat, the discounted valuation makes it worth the risk in my opinion. That’s why Howden Joinery is number two on my shopping list.
var config = {
apiKey: ‘1ed121d592e04642d57912bb369ef696621661a3’,
product: ‘PRO_MULTISITE’,
logConsent: false,
notifyOnce: false,
initialState: ‘NOTIFY’,
position: ‘LEFT’,
theme: ‘DARK’,
layout: ‘SLIDEOUT’,
toggleType: ‘slider’,
iabCMP: false,
closeStyle: ‘button’,
consentCookieExpiry: 90,
subDomains : true,
rejectButton: false,
settingsStyle : ‘button’,
encodeCookie : false,
accessibility: {
accessKey: ‘C’,
highlightFocus: false },
onLoad: function () { // hide Cookie Control recommended settings button.
var recommendedSettingsButton = document.getElementById(‘ccc-recommended-settings’);
if (recommendedSettingsButton) {
recommendedSettingsButton.classList.add(‘hide’);
} },
text: {
title: ‘Privacy Notice’,
intro: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
necessaryTitle: ”,
necessaryDescription: ”,
thirdPartyTitle: ‘Warning: Some cookies require your attention’,
thirdPartyDescription: ‘Consent for the following cookies could not be automatically revoked. Please follow the link(s) below to opt out manually.’,
on: ‘On’,
off: ‘Off’,
accept: ‘Accept’,
settings: ‘Cookie Preferences’,
acceptRecommended: ‘Accept Recommended Settings’,
notifyTitle: ‘Privacy Notice’,
notifyDescription: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
closeLabel: ‘Save Preferences and Close’,
accessibilityAlert: ‘This site uses cookies to store information. Press accesskey C to learn more about your options.’,
rejectSettings: ‘Reject All’,
reject: ‘Reject’,
},
branding: {
fontColor: ‘#fff’,
fontFamily: ‘Arial,sans-serif’,
fontSizeTitle: ‘1.2em’,
fontSizeHeaders: ‘1em’,
fontSize: ‘1em’,
backgroundColor: ‘#313147’,
toggleText: ‘#fff’,
toggleColor: ‘#2f2f5f’,
toggleBackground: ‘#111125’,
alertText: ‘#fff’,
alertBackground: ‘#111125’,
acceptText: ‘#ffffff’,
acceptBackground: ‘#111125′,
buttonIcon: null,
buttonIconWidth: ’64px’,
buttonIconHeight: ’64px’,
removeIcon: false,
removeAbout: false },
necessaryCookies: ( ‘wordpress_*’,’wordpress_logged_in_*’,’CookieControl’,’PHPSESSID’,’fivc’,’fivs’,’fivp’,’Ookie’,’Fool_subinfo’,’_gads’,’_gid’,’_gat’,’_ga’,’__utma’ ),
optionalCookies: (
{
name: ‘Sharing’,
label: ‘I would like content tailored to my personal preferences.’,
description: ‘We work with advertising partners to show you ads of products and services you may be interested in. You can choose whether or not to have ads delivered in a personalised way by setting this option. You can return to review this setting at any time by clicking the "C" logo in the bottom left corner of any page.’,
cookies: ( ‘_ga’, ‘_gid’, ‘_gat’, ‘__utma’, ‘_gads’ ),
onAccept: function () {
// Add Facebook Pixel
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=();t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)(0);
s.parentNode.insertBefore(t,s)}(window,document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘901682110316659’);
fbq(‘track’, ‘PageView’);
fbq(‘consent’, ‘grant’);
// End Facebook Pixel
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, true ) ;
},
onRevoke: function () {
fbq(‘consent’, ‘revoke’);
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, false ) ;
},
recommendedState: ‘on’,
lawfulBasis: ‘consent’,
},
),
statement: {
description: ”,
name: ”,
url: ‘https://www.fool.co.uk/help/privacy-and-cookie-statement/’,
updated: ”
},
};
CookieControl.load(config);
