Fundie rates 2 ASX 200 stocks in short-term pain but with long-term gain potential

Blackwattle Investment Partners sees these 2 ASX 200 stocks as worthy of a buy and hold strategy.

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S&P/ASX 200 Index (ASX: XJO) stocks are flying on Friday, up 1.01% to 8,406.8 points at the time of writing.

As the end of another year draws near, some ASX investors may be looking for new bargain buys to add to their portfolios for 2025.

In recent newsletters, Blackwattle Investment Partners named two ASX 200 stocks that are in short-term pain today, but have the potential for long-term capital gains.

Let's check them out.

Fundie tips 2 ASX 200 stocks to buy and hold

Blackwattle says the following 2 ASX shares were among the biggest detractors for two of their funds' performances in October. Despite this short-term pain, they see plenty of potential for long-term gain.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is trading at $17.07, up 0.53% on Friday. However, the ASX 200 travel stock has fallen 16% over the past six months, and it's down 10.4% over 12 months.

As the chart below shows, the Flight Centre share price has been volatile this year. But check out what happened in October. Flight Centre shares fell by close to 25% in just five trading sessions.

Created with Highcharts 11.4.3Flight Centre Travel Group PriceZoom1M3M6MYTD1Y5Y10YALL1 Jan 20244 Feb 2025Zoom ▾Jan '24Mar '24May '24Jul '24Sep '24Nov '24Jan '25Jan '24Jan '24May '24May '24Sep '24Sep '24Jan '25Jan '25www.fool.com.au

That share price dive was the result of a weaker 1Q trading update relative to consensus expectations on 18 October.

Despite this, Blackwattle Large Cap Quality stock portfolio managers Ray David and Joe Koh said the underlying quality of this ASX 200 travel business had significantly improved since 2020.

Of particular note is the growth of its FCM corporate travel business.

The portfolio managers said:

Total corporate transaction value has grown by more than 30% to $12bn since 2019, representing organic market share gains in a market still down 1015% from pre-pandemic levels.

A leaner cost base and new corporate mandates should drive profitability over time.

While leisure travel has peaked, increasing airline capacity and softer demand may result in higher commissions for distributors like Flight Centre.

Orora Ltd (ASX: ORA)

The Orora share price is $2.51, up 1.01 today. This ASX 200 materials stock has risen 17.6% over the past six months but is down 0.6% over 12 months.

As the chart below shows, Orora shares have also experienced volatility in 2024. October was a particularly challenging month for investors, given the materials stock dropped 11.7%.

Created with Highcharts 11.4.3Orora PriceZoom1M3M6MYTD1Y5Y10YALL1 Jan 20244 Feb 2025Zoom ▾Jan '24Mar '24May '24Jul '24Sep '24Nov '24Jan '25Jan '24Jan '24May '24May '24Sep '24Sep '24Jan '25Jan '25www.fool.com.au

Blackwattle Mid Cap Quality Fund portfolio managers Tim Riordan and Michael Teran said the ASX 200 global packaging business was the largest negative contributor to their fund's performance last month.

Riordan and Teran said:

ORA provided a trading update at its AGM in October, and while there was no outright downgrade, ORA warned that Saverglass still faces a challenging backdrop in the near term.

This was echoed in recent updates by European competitors, highlighting weak yet stable demand, disappointing some who expected emerging signs of recovery.

We had previously mentioned ORA as an 'improving quality' business that would require patience but was still attractive given the material valuation upside and a very strong balance sheet.

The market continues to be fixated with shorter-term earnings without balancing the longer-term intrinsic value.

The analysts said that a stock's "deep value can retrace extremely quickly", and they maintained an optimistic view of this ASX 200 stock.

…. we remain patient to capitalize the longterm valuation upside.

Our conviction is supported by the sale of the US Packaging Distribution business, which positions ORA to start onmarket buybacks, together with the strength of the high-quality Australian beverage packaging business.

ORA now trades below the $2.55 indicative bid from Lone Star, should the share price continue to languish, we would not be surprised to see further corporate attention.

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Motley Fool contributor ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ass="yoast-text-mark">ef="https://www.fool.com.au/author/TMFBronwyn/">Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group and Orora. 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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