When it comes to investing, there's certainly more than one way to skin a cat. Some investors go for growth companies that will outperform in their sectors, while others look for value in stocks trading unjustifiably below their intrinsic value.

Another interesting strategy is to look for companies that have accumulated a lot of debt. While most investors are wary of debt because of the impact it can have on a company's financials, the stocks of these companies usually trade at a discount.

If management can figure out a clear way to pay off this debt then the company's valuation can rise as the payments become more manageable and the company can start generating free cash flow. Here are two stocks that currently have more than $1 billion of debt that could soar in 2023.

1. Seritage Growth Properties

A former real estate investment trust, the retail and mixed-use developer Seritage Growth Properties (SRG 0.83%) really struggled since the pandemic. Shares have fallen from close to $38 in February 2020 to roughly $11.60 now.

But earlier this year, management announced its plans to liquidate the company's remaining assets over the next few years and distribute the proceeds to shareholders after what has been a long and difficult slog. The proceeds are expected to range from $18.50 to $29 per share.

As of Oct. 28, Seritage had total outstanding debt of $1.16 billion, which is the remaining portion of a $1.6 billion term loan the company got from none other than Berkshire Hathaway, Warren Buffett's company.

This is the first big obstacle for Seritage because the term loan matures on July 31, 2023. However, Seritage can extend the maturity date by two years if it reduces the outstanding principal balance to $800 million or less by July 31.

So far, the company has made the bulk of its debt payments this year including $180 million through two repayments in October.

The company also seems to be moving quickly on asset sales. In the third quarter, Seritage said it completed more than $411 million of asset sales and had a sales pipeline of $800 million of assets that were either under contract or had accepted offers.

The big risk is if the real estate market takes a dive and asset sales can't be completed. But with shares currently trading at almost 60% below the low end of management's payout range, there seems to be a good margin of safety currently built in.

2. Gannett

The largest newspaper publisher in the country, Gannett's (GCI) stock price plummeted in recent years as traditional print journalism struggled to find a financially viable business model.

In 2019, the company was acquired by another large publisher, New Media Investment Group, which took over the company but kept Gannett's name. In order to complete the transaction New Media took on a $1.8 billion term loan.

During the pandemic, things got very concerning for Gannett as its share price dropped below $1 and management adopted a poison pill to prevent investors from acquiring a large stake in the company without being authorized by Gannett.

Management also took advantage of the ultra low interest-rate environment in 2021 to refinance its debt. In addition, the company has been cutting costs through layoffs, real estate sales, and by closing newspapers that aren't profitable.

Meanwhile, Gannett has been building out its future digital media business and now has close to 2 million digital-paying subscribers. Gannett also has a growing digital marketing solutions business, which is a software business for small and medium-sized businesses. This business generates strong revenue and has good customer retention and attractive margins.

So far, Gannett paid down roughly $440 million of debt over the last roughly three years, while also dealing with some very difficult conditions brought on by the pandemic and the high inflationary environment now, which has hit its legacy print business hard. The company's current outstanding debt is now around $1.3 billion.

But with Gannett expected to soon start generating free cash flow after a difficult year, this should allow it to keep paying off debt at a healthy clip, which will make shares more attractive. The company currently trades around a $330 million market cap, which is just a fraction of the revenue it generates and just over one time projected 2022 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).