Down 43% in a year: 2 ASX 200 shares to buy 'well below fair value'

When quality businesses are punished for short-term issues, long-term investors can make hay.

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An unfortunate feature of the stock market is that quality companies will sometimes be punished on short-term issues.

But if you invest with a long-term mindset, those S&P/ASX 200 Index (ASX: XJO) shares could be bought at an absolute bargain to boost returns over the next few years.

Baker Young managed portfolio analyst Toby Grimm named two stocks as buys this week that fit that mould:

'A high quality, long-term growth company' going for cheap

Longtime market darling Resmed CDI (ASX: RMD) has had a miserable time of late.

The share price has plunged more than 43% since 10 September last year.

The market moved away from the sleep apnoea device maker especially since the most recent reporting season.

Created with Highcharts 11.4.3ResMed PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

"The share price of ResMed has significantly fallen since the company posted fourth quarter results in early August," Grimm told The Bull.

"Concerns about profit margins have overshadowed strong sales. Also, investors appear concerned that diabetes and obesity medicines may reduce the need for sleep apnoea products."

But all those worries are just noise, as far as Grimm is concerned.

"We believe the weaker share price creates a good buying opportunity in what we consider to be a high quality, long-term growth company that was recently trading well below fair value."

Indeed ResMed shares remain wildly popular in the professional community with 18 out of 23 analysts currently surveyed on CMC Markets rating it as a buy.

'A brighter outlook for long-term investors'

Despite the blockade of Russian supply still affecting global energy markets, APA Group (ASX: APA) shares are struggling big time.

The stock price for the energy infrastructure owner is down 18.8% since the start of the year.

Created with Highcharts 11.4.3Apa Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Nevertheless, Grimm feels like the business is heading in the right direction in the long run.

"This energy infrastructure business owns and operates a portfolio of gas, electricity, solar and wind assets around Australia.

"It recently completed a $675 million institutional placement to partly fund the proposed acquisition of Alinta Energy Pilbara."

The value is definitely there after the recent share price dive.

"In our view, APA offers a brighter outlook for long-term investors, as it was recently trading at a 10% discount to our valuation."

Motley Fool contributor Tony Yoo has positions in ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended Apa Group and ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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