The market is rising again after a sour 2022. While that's great for investors, it's reason to be cautious when starting new positions. Some prices already look highly inflated, and we're not necessarily out of the bear market yet.

Instead of getting caught up in the excitement of a hot stock, now's the time to look through the bargain bin and see what investors are passing over. Skechers (SKX -1.05%), Home Depot (HD -1.05%), and Revolve Group (RVLV 4.20%) are all well-positioned to charge forward when the economy gets stronger and are trading at cheap prices.

1. Skechers: Cheap and chic

Skechers, which makes athletic footwear and other products for the active lifestyle, posted excellent results in the 2023 first quarter, despite the world's economic woes. Its cheaper price point makes it an alternative to high-priced sneakers and gym wear. While that's universally appealing at any time, it's particularly potent in tough times.

Sales increased 10% year over year in the 2023 first quarter. Gross margin widened by more than 3 percentage points over last year, while operating margin improved from 9.7% to 11.2%. Earnings per share increased from $0.77 to $1.02. That's incredible profitability, considering its low prices and inflation.

Management's goal is to reach $10 billion in sales by 2026 from the current $7.6 billion. This gives investors plenty of upside, as long as profitability keeps up.

The company faced many challenges last year with inventory levels, which were caused by supply chain issues, but has landed comfortably and is moving forward.

There's been notable strength in its direct-to-consumer segment, which increased 25% in the first quarter and speaks to the popularity of its brand. It has 4,500 locations in addition to a wholesale business and digital presence.

Skechers has always had less-prestigious branding than some of its premium competitors but has inked new deals with popular celebrities like Doja Cat. This gives it a fun and funky branding, rather than just the low-priced alternative.

Skechers stock trades at around 20 times trailing-12-month earnings, or well below the three-year average of 25. Now is a great time to buy shares while they're still cheap.

2. Home Depot: Stalling with the housing industry but ready to run

Home Depot is a top stock that's been hurt by a drop in the housing industry, and pressured by incredible success early in the pandemic. Sales growth accelerated to rates not seen in years, and it's been difficult for the company to continue building on that performance.

One feature that marks it differently from other companies dealing with similar challenges is that it did not build out to meet soaring demand. Rather, it had already done that in the years prior to be prepared for increased demand. It overhauled its digital networks and omnichannel strategy in the years leading up to the pandemic and was prepared to manage demand carefully. 

Still, sales are slowing -- even more than management was anticipating. Revenue decreased 4.2% from last year in the 2023 first quarter (ended April 30), and earnings per share (EPS) dropped from $4.09 last year to $3.82 this year. 

CEO Ted Decker blamed the revenue miss on "lumber deflation and unfavorable weather," which saw its highest impact in California, coloring the entire business's results. Management lowered its outlook from sales to be essentially flat and a mid-single-digit decline in EPS to a 2% to 5% sales decrease and an EPS drop of 7% to 13%.

It's not surprising that the stock fell after that ugly report. However, it's already climbing as the economy is doing better than analysts predicted and a recession seems to be less and less likely.

Home Depot stock is about flat year to date and trades at a price-to-earnings ratio of 19, cheaper than the three-year average of 22. If it performs better than guidance, expect a short-term boost. But this is a stock you can hold onto for years, and now is a great time to buy.

3. Revolve Group: The new way to shop

Revolve Group operates an artificial intelligence (AI)-based fashion website that's popular and profitable. It sells luxury clothing but appeals to the masses, which is a targeted niche and an impressive feat. Since it works largely through celebrity endorsements and social media, it attracts people who love fashion and are willing to spend on it.

Some luxury companies have been doing OK in this retail environment because they target a clientele that doesn't feel the pinch of inflation as much as others. Revolve is different, so its performance is suffering right now. Sales dipped 1% from last year in the first quarter, and net income was down 37%.

But that same focus on the regular shopper who wants to pay for premium brands makes the company a star in a better economy. Revolve has cutting-edge AI systems that help it deliver on-trend products to its customers, and its all-digital format allows for easy changing of inventory.

Even now, there are strong indications of a resonant and relevant company that's building relationships with customers. Active customers increased by 19% over last year, and orders placed increased 6%. These are customers who are likely to stay on board and spend a lot more when they can.

Revolve stock trades at 27 times trailing-12-month earnings, a lot cheaper than its three-year average of 38. This is a stock you may regret not buying on the dip.