ASX 200 stocks are in a sea of red on Monday as losses pile on in every single sector.
Markets move in cycles. We have to accept that. For the patient, long-term investor, these cycles present tremendous opportunities.
The elixir of investing is purchasing a passive interest in a high-quality business at a price far less than its true worth. As Warren Buffett famously said, "Whether we're talking about stocks or socks, I like buying quality merchandise when it is marked down."
ResMed Inc (ASX: RMD) and Breville Group Ltd (ASX: BRG) are two companies that fit this bill, in my opinion.
Despite a general market downturn, these two ASX 200 stocks show promising potential for the patient,, long-term investors I am talking about.
Each has durable competitive advantages that are hard to replicate and possess a large market share in their respective domains.
Let's have a look.
ASX 200 stocks for the long-term
With the bulk of ASX 200 stocks down today, ResMed shares have shown their resilience. At the time of writing, they are 4.2% green and trade at $33.16.
The buying support is likely thanks to a strong Q4 FY24 update from the respiratory device company.
In it, ResMed reported a 9% increase in revenue to US$1.2 billion. Demand for sleep devices and masks, its core market, underscored growth.
Notably, with the revenue growth, ResMed's gross margin improved by 3.5%, which is positive in the current economic climate.
The company's board also approved 10% to US$0.53 per share.
Analysts at Macquarie retain a buy rating on ResMed and recently raised their price target to $36.25 per share.
The broker is impressed with the company's margins and FY 2025 guidance, which surpassed expectations last quarter.
In my opinion, ResMed is well-positioned to increase its market penetration and earnings growth, and its recent quarterly numbers add weight to this view.
Breville steams ahead
Breville Group shares aren't immune from the selloff today and are down nearly 4% to $27.91 apiece.
Whilst it's been quiet from the appliance manufacturer's end in 2024, analysts at Goldman Sachs rate the ASX 200 stock a buy with a $30.00 price target.
With today's pullback, the upside potential has increased to more than 7%.
Goldman projects sales growth of 9% in the second half of FY 2024, driven by "first-time US sell-ins to Target and improving sales in Europe and the Middle East".
The broker is also optimistic about Breville's market potential, noting high barriers to entry in the premium coffee machine market.
Its research suggests that Breville has significant growth opportunities in the semi- and fully manual coffee machine segments.
The company's strength in this at-home coffee market is bolstered by the fact there are many tailwinds behind this domain.
Breville also paid a fully franked dividend of 32 cents per share in the last 12 months.
Foolish takeaway
In such a challenging market, it's important not to get caught up in the day-to-day. Maintaining a long-term view is key, as is buying high-quality businesses at sensible prices. That's why market pullbacks aren't all that bad.
ResMed and Breville might present compelling ASX 200 stocks in my view. Both companies show good growth prospects and have garnered positive attention from top analysts. Remember to conduct your own due diligence.
