The U.S. stock market started plummeting from all-time highs in January, and investors have been looking for a bottom ever since. If the market's last big dip in October was the floor we've been looking for, adding the best stocks to your portfolio now could lead to dramatic gains in 2023 and beyond.

Nobody knows if the market beatings we've seen throughout 2022 will continue into 2023. That said, we know that every time stock markets fall hard, relatively long periods of recovery eventually drive them to new heights.

Smart investor studying stock charts.

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The next recovery may have started already, or it might not start for another year. Whatever the case, we can be fairly certain that the profits these elite businesses have already started generating will grow by leaps and bounds. That means patient investors who buy now have an excellent chance to come out ahead over the long run.

ShockWave Medical

Shares of ShockWave Medical (SWAV) soared in August, but the stock has come down about 26% from its all-time high. This medical technology company makes intravenous lithotripsy (IVL) devices that are vastly improving the way surgeons clear blocked arteries. 

Shockwave's IVL devices are sound-wave-emitting catheters that pulverize calcium deposits embedded in arterial walls. Softened arteries are far less likely to split and cause serious complications when an angioplasty balloon stretches them from the inside out. This is incredibly useful because calcification of the arteries that serve the heart occurs in over 90% of men and 67% of women over 70 years old.

Shockwave was able to report third-quarter revenue that jumped 102% higher year over year thanks in large part to the launch of a coronary product in the U.S. that began in February of 2021. European regulators recently cleared the same device so investors can reasonably expect more rapid sales growth in 2023.

The triple-digit sales growth Shockwave Medical has been reporting hasn't gone unnoticed by the broad market. The stock currently trades at a nosebleed-inducing multiple of 78 times forward-looking earnings expectations.

With its stock price at such a high valuation, the slightest hint of a slowdown could cause Shockwave's stock to fall dramatically. As the only IVL device manufacturer, the company has a great chance to grow into its lofty valuation and deliver market-beating gains over the long run.

Lovesac

If you consider a high price-to-earnings (P/E) multiple a red flag, you might want to look at Lovesac (LOVE -0.56%) and its ultra-low valuation of just 9.3 times forward-looking earnings expectations. This company markets the high-end beanbag chairs it's named after, but its main business these days is premium sectional seating it calls Sactionals.

Sales of furniture and just about anything that made the lockdown period of the COVID-19 pandemic easier to bear rocketed higher in 2021, but the good times didn't last. Lovesac's stock price has fallen a stunning 70% this year because furniture sales, in general, are contracting. According to Lovesac, industrywide couch sales are down by a mid-teen percentage this year compared to last.

This is an especially difficult time to be in the furniture business, but that didn't stop Lovesac from reporting comparable sales that rose 8.9% year over year. Lovesac is a direct-to-consumer business, but it has kiosks and pop-up showrooms in Best Buy and Costco locations that are currently driving growth. With kiosks in just 22 Best Buy stores at the end of the third quarter, Lovesac could continue growing sales by simply expanding this partnership.

Lovesac's Sactionals are intended to grow or shrink with a customer's needs, and the company is fully committed to what it calls a Built for Life business model. For example, the company launched powered surround-sound speakers last October that fit into all of the sofas it's sold over the last decade. We can tell the plan is working because 4 out of 10 transactions came from repeat customers in Q3.

Lovesac's valuation is so low right now that investors will come out way ahead if profits never budge from present levels. With plenty of Best Buy and Costco locations slated to open new Lovesac kiosks this year, further growth seems highly likely. Put it together, and this looks like a great stock to buy now and hold over the long run.