Author: openjargon

The Temple & Webster Group Ltd (ASX: TPW) share price has fallen by a huge amount, it’s down by around 80% in the past year, as the chart below shows. I think the opportunity on offer makes it one of Australia’s top shares.

It’s rare for a growing business to fall by that much. Temple & Webster’s revenue may not grow in FY27, but it has a long history of delivering growth.

The current economic environment is tough for households, but I think it’s a rare situation and the decline could be a great time to take advantage.

Let’s run through why I think it’s a strong long-term buy today.

Great revenue opportunity

In its FY26 presentation, the company highlighted that the Australian furniture and homewares market is approximately $19 billion.

Adoption of online shopping has grown significantly since 2019. Over time, I expect Australia’s e-commerce rate to increase towards what’s seen in the UK and the US, which could help Temple & Webster’s market share.

At the latest measurement, Temple & Webster’s market share in Australian furniture and homewares reached 2.9%.

The company sells hundreds of thousands of products and more than half of its revenue is from exclusive products, with 83% of the top 500 selling products in FY26 being exclusive.

Temple & Webster regularly expands its private label range, giving the company more scope to capture more of the value of the sale. Currently, most products ship directly from suppliers to customers, giving Temple & Webster a capital-light business model and, in my view, making it one of Australia’s top shares.

Higher profit margins expected

In the coming years, I’m expecting the business to deliver rising profit margins.

The company is targeting $33 million to $40 million of operating profit (EBITDA) in FY27, while retaining flexibility to use its ‘delivered margin’ and marketing “levers” to respond to market conditions and drive revenue growth.

FY26’s EBITDA margin was 3.3%. The company expects the EBITDA margin to rise to between 5% to 6% in FY27 and reach at least 15% in the long-term.

To achieve that higher profit margin in the longer-term, it expects to achieve a delivered margin of more than 33% (it was 30.2% in FY26), a delivered margin after marketing costs of more than 22% (15% in FY26) and a contribution margin of more than 20% (13.4% in FY26).

If margins keep climbing towards those numbers, I think the company will go some way to justifying itself as one of Australia’s top shares.

Initiatives that should help include a lower fixed cost as a percentage of revenue (thanks to revenue growth), a company-wide approach to AI adoption to boost revenue and lower costs, and an ongoing review of potential cost savings or improved efficiencies.

Additional growth avenues

The third reason to like this business as one of Australia’s top shares is because of the company has found ways to expand its growth potential with additional revenue streams from home improvement, trade and commercial, and New Zealand sales.

In FY26, its home improvement segment saw revenue growth of 39% to $59 million, trade and commercial grew revenue by 16% to $56 million and New Zealand delivered approximately $3 million of revenue in its first eight months (running at a contribution breakeven level).

I don’t know what FY27 holds for those three segments, but I think the long-term looks very promising, particularly for home improvement with how there isn’t a dominant player in that retail sector.

I think it looks cheap now after falling about 80% over the past year, at the time of writing. I’d be very happy to buy Temple & Webster shares.

The post A rare buying opportunity in 1 of Australia’s top shares? appeared first on The Motley Fool Australia.

More reading

• Tuas vs Temple & Webster: Which beaten-down ASX share offers better value?
• Temple & Webster vs Harvey Norman: Which beaten-down ASX retailer offers better value?
• Adairs vs Temple & Webster: Which ASX retail stock wins for October?
• Where I’d invest in ASX shares after the recent RBA rate rise
• Temple & Webster vs Nick Scali: Which furniture share is better?

Motley Fool contributor Tristan Harrison has positions in Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The fund manager Wilson Asset Management (WAM) has named a couple of leading S&P/ASX 200 Index (ASX: XJO) share picks within the WAM Capital Ltd (ASX: WAM) portfolio.

WAM is looking for the most compelling undervalued growth opportunities in the Australian market. Typically, the investment team at WAM wants to find ideas with a catalyst that can boost the share price.

WAM Capital is a listed investment company (LIC) that is looking further down the market capitalisation list, rather than just the biggest names.

The Wilson Asset Management fund managers picked out a metal detection and communications company and a network-as-a-service provider, both of which contributed to portfolio outperformance during August 2026.

Let’s take a look at why the investment professionals like these businesses.  

Codan Ltd (ASX: CDA)

The first ASX 200 share highlighted by WAM was Codan, an Australian technology company that develops and manufactures metal detection and communications solutions.

The investment team highlighted that the Codan share price rose in September following a trading update in which the company upgraded its FY27 earnings expectations. Management noted stronger-than-expected demand across its communications segment.

Wilson Asset Management noted that conflict-affected regions were a major part of the uplift, accounting for approximately 50% of the FY27 first-half communications segment revenue, up from approximately 20% in the prior corresponding period.

WAM said the ASX 200 share’s metal detection segment also experienced a solid start to FY27, supported by recently launched products and a favourable gold price.

Wilson Asset Management’s investment team concluded its optimistic thoughts on the ASX share:

We remain confident in Codan’s medium-term growth outlook given its exposure to material spending tailwinds in defence globally.

Megaport Ltd (ASX: MP1)

The other ASX share that WAM highlighted was Megaport, a network-as-a-service provider focused on connectivity and compute infrastructure across global data centres.

The investment team noted that Megaport performed strongly amid several positive news stories in September.

Those developments included securing approximately $1 billion in new artificial intelligence (AI) infrastructure contracts and a subsequent upgrade to the guidance for the 2027 financial year.

The three new AI infrastructure agreements increased the company’s combined total strategic contract value to approximately $2.3 billion across the contracts announced since April 2026.

Wilson Asset Management said the company remains well-positioned to grow its customer base, supporting its strategy of reducing overall customer concentration risk.

The investment team concluded:               

We remain positive on the company’s ability to capitalise on growing demand for AI infrastructure.

The post A top fund manager is bullish on these ASX 200 shares appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares
• UBS’ top nine ASX large-cap stock picks
• Here are the top 10 ASX 200 shares today
• Could $10,000 invested in Megaport shares double by 2030?
• Buy, hold, sell: Resmed, Megaport, ANZ shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I am fortunate enough to have built a very sizeable six-figure ASX share portfolio at 35.

It has taken a number of years of making good choices and putting money to work that has led to the financial position that I’m in today, as well as a dose of luck.

I’m very lucky to live in one of the best countries in the world, where there are various tools that help regular people grow their net worth.

There are plenty of countries that don’t have well-paid work, tax-efficient retirement savings, a reliable banking system, franking credits, reliable utilities, or huge quantities of valuable resources. Without many of those, I wouldn’t be sitting here with the portfolio I do have. Of course, those advantages Australians have are on a society-level. What we personally do is very important too.

In a moment, I’m going to outline three factors that my household has worked on in the last several years.

Before getting to what I’ve done, I just want to note that everyone is on their own financial journey with different starting points, income levels, family support, and so on. We’re not ‘racing’ other people, we’re just trying to get ahead of ourselves.

Think about your current financial picture – it’s the culmination of all the actions and decisions made up to this point. Almost any Australian can make a big difference to their wealth over the next decade.

Of course, having a 10% larger portfolio doesn’t mean I’ll be 10% happier or have fewer life responsibilities. But, building towards a goal is motivating, and having financial freedom would be a great position to be in.

Over the last ten years, I’ve diligently followed a step-by-step plan to help reach a six-figure ASX share portfolio. In the next decade, I hope to reach my financial goals by following the same plan. Let’s run through what I’m doing.

Save and earn

The core foundation of most households’ finances is the income they generate from their work, whether that’s as an employee, business owner, or in another form of work. My household’s finances are also driven by work earnings.

Our current financial position is the embodiment of the choices we make. What we do with money then decides how our financial picture evolves over the months and years.

How much we earn, how much we pay for the roof over our heads, the cost of the car (or public transport), the cost of the food we eat, and so on. It all counts.

If someone wants to improve their finances, then increasing earnings is one of the best things you can do. But try to ensure that lifestyle inflation doesn’t eat into the income gain. Some people may have an income problem, while some households may have a spending problem. Earning more could just mean having more to spend rather than putting it into building wealth.

The close-to-minimum-wage full-time job that I had when I first started renting was enough to pay for the essentials, save $200 per month into a savings account, and focus on free entertainment and activities. I just about made it work (with my partner), but we started with a savings mindset and always wanted to avoid debt in life (aside from a future mortgage).

Thankfully, with a growth mindset, investing in useful qualifications, and joining The Motley Fool writing team, my household income increased so that we could start saving a solid amount each month. Household income can come from any industry. Some of those savings went into investing in ASX shares.

Remember, it’s what we save rather than what we earn that ultimately decides how much we can invest each year.

Personal finances are the foundation of building wealth. Good foundations will help build wealth, while overspending or debt can be very problematic.

Invest in ASX shares and ETFs

Having money in a savings account is a good step. It generates interest income and can serve as an emergency fund when we need accessible money.

But, I don’t think interest alone is powerful enough to help grow wealth when inflation eats away at the value of a dollar.

I think shares are the best way to grow wealth because they can deliver capital growth, dividends, and dividend growth.

The compounding effects of the share market are much more powerful than savings accounts.

The investment that has added the most wealth to my net worth has been the investment conglomerate Washington H. Soul Pattinson and Co Ltd (ASX: SOL), which has a great track record of delivering dividend growth and capital growth over the past three decades with its growing portfolio of assets.

There are plenty of quality exchange-traded funds (ETFs) that can help investors gain exposure to great businesses for a low cost, such as Vanguard MSCI Index International Shares ETF (ASX: VGS), VanEck MSCI International Quality ETF (ASX: QUAL), or Betashares Global Quality Leaders ETF (ASX: QLTY).

Ultimately, I’m investing in things I think will perform well over five or ten years, not just the next six months or a year.

There’s no one right way to invest and grow wealth. I’ve gone for a mixture of ASX dividend shares and ASX growth shares. A lot of this website (including subscription services) is about choosing the right investments. Just pick something you could see yourself owning for five, ten, or even more years into the future, even if there’s uncertainty.

Think long-term

Compounding is a very powerful force that helps our investments grow in value over time. A $1,000 investment can double in value in eight years if it grows by 10% per year.

I’m not looking to trade in and out of ASX shares. I’m not thinking with a one-year investment time horizon.

Investing for the long term has allowed me to ignore short-term noise. It doesn’t matter what happens in 2026 if I’m investing with 2036 or 2046 in mind.

Heavy market sell-offs are painful in the moment. But, I’d view them as the worst time to sell and the best time to buy. I’d rather buy assets at lower prices than at higher prices. I regularly invest every month, but market declines get me more excited to invest.

Thankfully, my household was able to invest materially during the COVID volatility in 2020 and the inflation troubles of 2022 and 2023. If something else happens, I’ll invest heavily again and be greedy when others are fearful.

With a long-term goal of growing wealth and keeping the ‘why we’re doing it’ in mind, we’re steadily reaching our financial goals and I’d love to have a $1 million ASX share portfolio one day, though that’s still a long way away.

The post The 3 factors that have helped me build a six-figure ASX share portfolio at 35 appeared first on The Motley Fool Australia.

More reading

• CBA vs Soul Patts: Which ASX share wins in 2026?
• 3 excellent ASX ETFs for beginners in 2027
• How much is needed in superannuation to target a $100,000 annual passive income?
• 17 ASX shares going ex-dividend next week
• 3 strong ASX ETFs for investors who want quality

Motley Fool contributor Tristan Harrison has positions in VanEck Msci International Quality ETF and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Arena REIT (ASX: ARF) share price is in focus after the real estate investment trust shared an update on its Edge Early Learning portfolio, with rent continuing to be received on all 27 affected properties.

What did Arena REIT report?

• Arena is receiving rent on all 27 properties leased to Edge Early Learning.
• The administrator of Edge has entered binding agreements or term sheets to sell 22 early learning centre businesses to six parties.
• The transactions cover all seven Arena-owned properties currently operated by Edge.
• Four proposed new tenants: Montessori Academy (2 centres) and three experienced operators for the remaining 5 centres in Queensland.
• Arena holds a $4 million bank guarantee and security deposits over the Edge leases.

What else do investors need to know?

Arena is currently conducting due diligence on the proposed assignments of leases for the impacted Arena-owned centres. These transactions are still subject to confirmatory checks, final documentation, regulatory approvals, and the formal transfer of service licences.

Of the four Edge centres that are directly controlled by Arena, one has signed lease documentation and two have term sheets with Montessori Academy—pending regulatory approval. The trust continues to reserve its legal rights and is actively managing risk through security held over the leases.

What’s next for Arena REIT?

Arena will continue due diligence before consenting to the assignment of leases. Outcomes will depend on completion of transactions and regulatory consents. The trust has secured its income stream in the near term and will update investors as further developments occur with the Edge Early Learning portfolio.

Arena’s broader strategy remains focused on its core social infrastructure properties in the early learning and healthcare sectors, supported by a diversified tenant base.

Arena REIT share price snapshot

Over the past 12 months, Arena REIT shares have declined 39%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 1% over the same period.

View Original Announcement

The post Arena REIT provides Edge Early Learning update appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target $2,000 a week in passive income
• 3 ASX real estate investment trusts paying a dividend yield of more than 7%
• Here are the top 10 ASX 200 shares today
• Arena REIT shares in focus as Edge Early Learning lease update issued
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Laura Stewart 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Capricorn Metals vs PDI Gold shares: which has more upside?

Gold miners are back in the spotlight, and many investors are weighing up where the biggest opportunities still lie. Today I’m comparing Capricorn Metals Ltd (ASX: CMM) and PDI Gold Ltd (ASX: PDI), two top-performing gold stocks on the ASX. If you’re looking to ride the next wave in gold, which company has more upside left? Here’s my deep dive.

The case for Capricorn Metals

Capricorn Metals is a Perth-based gold producer with two main projects: Karlawinda, an established operation in the Pilbara, and the recently acquired Mt Gibson in Western Australia’s Mid-West. The business is focused on growing through ongoing exploration and increasing its gold output. According to its most recent corporate description, Capricorn holds a resource base of 4.4 million ounces and has proven reserves of 1.3 million ounces—a strong foundation for future production.

From a fundamentals perspective, a few points stand out:

• Market capitalisation: $6.74 billion, making it a substantial player in the Aussie gold sector
• P/E ratio: 23.39, so investors are paying a decent premium for its earnings compared to many miners
• Dividend yield: 0.68%, fully franked, with dividends paid twice a year (most recently $0.05 per share final in October 2026 and $0.05 interim in April 2026)
• EPS: $0.630 per share
• Year to date return: 3.2%

Capricorn Metals also stands out for paying consistent, fully franked dividends—a rarity among local gold companies, even if the yield itself is modest.

The case for PDI Gold

PDI Gold Ltd, formerly Predictive Discovery, is a gold developer focused on West Africa. The flagship Bankan Gold Project in Guinea positions it as a major player in the region. Following its late 2025 merger with Robex Resources, PDI now controls a combination of two of the largest gold developments in West Africa. This gives it a substantial footprint and exposure to a region that’s seen strong recent interest from global gold investors.

Here are the highlights from the current fundamentals:

• Market capitalisation: $4.42 billion
• P/E ratio: Not applicable (the company is not yet profitable, with earnings per share at -$0.110)
• No dividends paid to date
• Shares outstanding: 988.17 million
• Year to date return: 21.6%

What really leaps out is PDI’s explosive recent performance—the share price has surged over 21% so far this year. While it’s still firmly in the development and exploration stage with no profits or dividends, investors have clearly been backing its growth story, especially after the transformative Robex merger.

Valuation comparison

With both companies operating in the gold space but at different stages, a few contrasting points stand out:

Metric	Capricorn Metals	PDI Gold
Market Cap	$6.74 billion	$4.42 billion
P/E Ratio	23.39	N/A (loss-making)
EPS	$0.630	-$0.110
Dividend Yield	0.68% (fully franked)	0.00%
YTD Return	3.2%	21.6%

Capricorn is a profitable, dividend-paying producer with a moderate earnings multiple. PDI, by contrast, is a larger-scale explorer and developer with no profits (so no P/E ratio or dividends), but its bigger market cap reflects market optimism about future cash flows. Note: PDI Gold’s lack of a P/E or earnings yield is simply because it’s not profitable yet. Both operate in gold, but investors are paying for current profit in Capricorn and for future growth in PDI.

Recent share price momentum

Comparing recent share price performance up to 9 October 2026:

• Capricorn Metals closed at $14.74 on 9 October 2026, up 1.4% for the day but only up 3.2% for the year to date. The last month saw a few sharp swings but overall a fairly flat trend.
• PDI Gold closed at $4.47 on 9 October 2026. It’s delivered a stunning 21.6% year-to-date return, with several recent upswings—especially after the Robex merger hype. The price is holding high after a stretch of volatility.

Both companies have seen volatility, but PDI Gold has handsomely outperformed Capricorn Metals so far in 2026.

Which is the better buy?

If I had to pick just one for more upside from here, I’d lean toward PDI Gold. The company has already run hot in 2026, and while that adds risk, I think its combination with Robex and focus on a major African resource hub puts it in a structural growth sweet spot. There are clear risks—no profit or dividend yet, and gold mine development in West Africa carries geopolitical and project execution complexity. But the market is backing PDI as an emerging powerhouse, and momentum is clear. By contrast, Capricorn Metals looks like the safer, steadier choice—it’s profitable, already producing, and pays fully franked dividends. But its muted recent performance and richer P/E make me think the biggest gains may have already been captured for now. For investors with the stomach for more volatility and who want exposure to the next big gold story, my pick would be PDI Gold.

The post Capricorn Metals vs PDI Gold: Which high-flying ASX gold stock has more upside left? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• This up-and-coming ASX gold producer could rise more than 50%: Broker
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Laura Stewart 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Investors on the lookout for big returns might want to check out the two shares below that feature on the S&P/ASX 300 Index (ASX: XKO).

That’s because the team at Bell Potter has just recommended them to clients and is predicting returns of 16% to 38% over the next 12 months.

GenusPlus Group Ltd (ASX: GNP)

Bell Potter sees a lot of value in this Australian infrastructure services provider’s shares.

The broker was pleased with news that GenusPlus is acquiring Universal Communications Group Holdings. It highlights that the deal adds scale and capability to its telecommunication services offering, including network maintenance.

It also expects it to be immediately earnings accretive and provide a platform to drive further growth in New Zealand across telecommunications and other critical infrastructure markets.

In response, the broker has retained its buy rating and $12.80 price target on the ASX 300 share.

Based on its current share price and including dividends, this represents a total potential return of 38% for investors.

Commenting on its recommendation, Bell Potter said:

We view the UCG deal as strategic. The UCG acquisition will fast-track GNP’s multimarket growth strategy across the Communications, Transmission, Wind, Rail and Gas sectors. The UCG acquisition also provides a platform to extend GNP’s existing construction and maintenance capabilities in New Zealand.

Southern Cross Electrical Engineering Ltd (ASX: SXE)

Another ASX 300 share that has been given the thumbs up is Southern Cross Electrical Engineering.

It is a leading Australian national provider of specialised electrical, instrumentation, communications, security, fire, and maintenance services.

Bell Potter notes that it has also announced an acquisition this month. Southern Cross Electrical Engineering has agreed to buy Entire Operations, which is a Melbourne-based provider of integrated fire protection and mechanical (HVAC) services.

The broker has boosted its earnings estimates for FY 2027-2029 to reflect the deal and has lifted its valuation accordingly.

According to the note, the broker has retained its buy rating on the ASX 300 share with an improved price target of $5.70.

Based on its current share price and including dividends, this would mean a total return of around 16% for investors over the next 12 months.

Speaking about the acquisition, Bell Potter said:

The acquisition of Entire ticks a lot of boxes and mirrors SXE’s prior acquisition playbook. Firstly, Entire expands SXE’s existing fire suppression market exposure and extends skillsets into a new market, HVAC, which is underpinned by structural tailwinds already benefiting the Group. 

Secondly, the deal valuation and EPS accretion is attractive and underpins the FY27 guidance upgrade. Lastly, fire suppression and HVAC are complementary adjacent service offerings to SXE’s core electrical capabilities.

The post 2 ASX 300 shares tipped by brokers to return 16% to 38% appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why this ASX 300 share could rise 32%
• 5 things to watch on the ASX 200 on Friday
• 13 ASX shares with ex-dividend dates next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended GenusPlus Group. The Motley Fool Australia has recommended GenusPlus Group and Southern Cross Electrical Engineering. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Rio Tinto Ltd (ASX: RIO) share price has been a strong performer within the S&P/ASX 200 Index (ASX: XJO) over the past year, rising by 28%, as the chart below shows.

Rio Tinto is involved with a number of commodities including iron ore, copper, aluminium, bauxite and lithium. Not many miners around the world have as much commodity diversification as Rio Tinto.

The ASX mining share may be best known as an Australian iron ore miner, but there’s a lot more to the business now. I think that makes it a much more appealing business than it was several years ago.

For me, there are at least three compelling reasons to consider the business.

Growing copper exposure

Iron ore prices can be volatile and don’t seem to have a strong outlook at present because of headwinds for both supply and demand. Non-Australian regions are looking to increase iron ore production (supply), and the huge Chinese residential construction boom isn’t happening these days (demand).

Rio Tinto has deliberately and significantly increased its exposure to copper with a number of projects. Copper is essential for a number of growth areas such as electricity grids, renewable energy, electric vehicles and so on.

One of the company’s key growth projects is Oyu Tolgoi, a huge copper operation in Mongolia. At peak production, Oyu Tolgoi is expected to produce 500,000 tonnes per annum of copper.

I think the 2026 half-year result strongly demonstrated the copper division’s performance. The sold copper price increased by 35.5%, while copper operating earnings (EBITDA) soared by 84% to US$5.7 billion. I’m not expecting every result to see that much growth.

Lithium mining

I think it was a smart move by Rio Tinto to acquire Arcadium Lithium a couple of years ago, at a time when the sector was facing significant pessimism.

Its exposure to lithium now looks very appealing, with how the lithium price has rebounded, and electric vehicle demand has increased following the fuel uncertainty because of the Middle East.

The company is not generating a lot of earnings from this division because it’s still developing its projects. But in the first half of FY26, the average realised lithium carbonate price rose 22% to US$18,960, segment revenue rose 84% to US$568 million, and underlying operating profit (EBITDA) rose 419% to US$218 million.

If lithium battery demand continues to grow, predominantly due to electric vehicles, then this division could become a meaningful contributor in the coming years.

African iron ore

It’s possible that Australian iron ore may lose some of its strategic significance in the coming years.

Fortescue Ltd (ASX: FMG) recently highlighted that there are ongoing negotiations with China Mineral Resources Group (CMRG), a key buyer of iron ore. It could become harder to get a great price for Australian iron ore.

Meanwhile, Rio Tinto is working on a huge African iron ore project called Simandou. The fact that it’s in partnership with Chinese operators (and the Government of Guinea) hopefully bodes well for the future realised (sold) iron ore price.

The scale of this project could mean significant production and appealing profit margins. I think it’s a good idea to diversify away from Australian ore.

Overall, I believe the three factors above could lead to strong profits and good dividends, making Rio Tinto’s share price appealing.

The post 3 reasons why the Rio Tinto share price could be a buy appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares
• Down 29% so far in 2026: What do brokers tip next for Fortescue shares?
• Fortescue vs Rio Tinto: Which ASX mining giant is the better buy today?
• Fortescue vs BHP: Which ASX miner is better for passive income in October?
• 9 ASX 200 shares upgraded by brokers this week

Motley Fool contributor Tristan Harrison 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are in the market for some new portfolio additions, it could be worth seeing what the team at Morgans is saying about the three ASX shares in this article.

Does the broker rate them as buys, holds, or sells? Let’s find out:

Fortescue Ltd (ASX: FMG)

Morgans was disappointed with this iron ore giant’s recent update, which revealed weak shipments and higher net debt.

In response, the broker has downgraded Fortescue shares to a trim rating with a reduced price target of $15.40. It said:

We have long argued that investing material capital in near-term loss-making projects (magnetite and new energy) has not diversified Fortescue, and has instead left group earnings more exposed to the iron ore price. Magnetite adds more iron ore exposure but at a higher cost, while new energy investment, and US$0.9-1.3bn of FY27 decarbonisation spend, are funded from hematite cash flow. 

This dynamic is starting to show in the numbers. Fortescue flagged that net debt rose US$1.9bn in 1Q27, equal to the final dividend (US$1.0bn) plus quarterly capex (US$0.9bn), implying negative FCF for the quarter. We attribute this mainly to weaker hematite cash flow after the central buying group China Mineral Resources Group (CMRG) reportedly halted purchases of two of Fortescue’s products during the quarter, leaving shipments 6% and actual sales 14% below Visible Alpha (VA) consensus in 1Q27. On updated estimates we lower our rating to TRIM (from HOLD) with an A$15.40 target price (was A$18.70).

Guzman Y Gomez Ltd (ASX: GYG)

Another ASX share that has been downgraded by Morgans is quick service restaurant operator Guzman Y Gomez.

While it has been pleased with its resilient performance, the broker cut its rating in response to recent share price strength. 

Morgans has downgraded Guzman Y Gomez shares to an accumulate rating with an improved price target of $31.30. It said:

We view GYG’s 1Q27 trading update as evidence that its sales are resilient. Backing out the high-single digit first seven weeks already disclosed (we estimate ~8.5%, supported by the Uber Eats deal), comps ran at ~5.5% in weeks 8-13, transaction-led and in line with the mid-single digit FY27 guidance. 

GYG remains our key pick in the QSR sector and the highest-quality operator in our coverage. We lift our FY27 same-store sales (SSS) growth forecast by 50bps to 5.5% and refine our margin mix, which raises FY27 underlying EPS by 1.9% and our price target to A$31.30 (from A$31.00). We move to ACCUMULATE (from BUY) given recent share price appreciation and would be buyers on any weakness.

Megaport Ltd (ASX: MP1)

One ASX share that Morgans is recommending to clients is cloud infrastructure provider Megaport.

It was impressed with its recent update, which revealed a significantly stronger earnings outlook.

In response, the broker has retained its buy rating on Megaport shares with an improved price target of $27.00. It said:

MP1 recently raised its FY27 EBITDA guidance by 25%. The compute and network businesses continue to deliver above expectations and MP1 announced three new AI infrastructure contracts with a Total Contract Value of ~A$1bn. Collectively these set a glide path for annualised EBITDA in excess of $850m. >We upgrade our EPS forecasts materially. Our Target Price lifts to A$27 per share and we retain our BUY recommendation.

The post Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares appeared first on The Motley Fool Australia.

More reading

• 3 reasons why the Rio Tinto share price could be a buy
• UBS’ top nine ASX large-cap stock picks
• Here are the top 10 ASX 200 shares today
• Down 29% so far in 2026: What do brokers tip next for Fortescue shares?
• Fortescue vs Rio Tinto: Which ASX mining giant is the better buy today?

Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Droneshield vs Pro Medicus shares: Which ASX growth stock comes out on top?

Weighing up Droneshield Ltd (ASX: DRO) and Pro Medicus Ltd (ASX: PME) as growth shares? Both are well-known names in their own fields, but they couldn’t be more different. Whether you’re into defence tech or backed by healthcare innovation, choosing between Droneshield and Pro Medicus means thinking about more than just which one’s made headlines lately. Let’s take a closer look at what sets them apart for ASX growth investors.

The case for Droneshield

Droneshield rides the wave in anti-drone and counter-drone technology. The company’s artificial-intelligence-driven hardware and software help protect critical infrastructure, venues, and government operations from drone threats – a niche but increasingly important sector. Its products, such as DroneGun and DroneSentry, are in use by militaries, airports, and commercial operators across Australia, the US, and the UK.

From a fundamentals angle, a few things really stand out:

• Market cap: $1.45 billion — Droneshield is a chunky player in Australian defence tech, but much smaller than Pro Medicus.
• P/E ratio: 433.75, which is extremely high on face value. Note, though, Droneshield’s earnings per share is negative (-$0.033), so this P/E may be based on adjusted or forward figures rather than traditional trailing earnings.
• Dividend yield: 0.00%. This is a pure growth story — you’re not investing here for income today.

Droneshield’s share price has had a wild ride recently and is well down for the year, but its underlying business taps into a field where new geographies and customers could drive future bursts of growth.

The case for Pro Medicus

Pro Medicus is no stranger to growth investors. It’s a leading Australian medical imaging software company, providing radiology systems and cloud-based solutions for hospitals and health networks, with a particularly strong foothold among US clients. If healthcare digital transformation continues, Pro Medicus is clearly positioned to benefit.

Looking at the key metrics:

• Market cap: $17.31 billion — more than ten times Droneshield’s, putting Pro Medicus up with the ASX big hitters.
• P/E ratio: 65.35, reflecting very high growth expectations, but nowhere near the triple-digit figure we see at Droneshield.
• Dividend yield: 0.42%. While modest, Pro Medicus does pay regular, fully franked dividends, which can be appealing for some growth-minded income seekers.
• Earnings per share: 2.536, well into positive territory and supporting sustainable growth alongside dividends.

Pro Medicus has a proven track record of scaling up from Australia to dominate radiology tech for major hospitals worldwide, and its fundamentals show the company is profitable, pays dividends, and holds a healthy valuation compared to its own sector.

Valuation comparison

Here’s how the two stack up on key numbers:

Metric	Droneshield	Pro Medicus
Market Cap	$1.45 billion	$17.31 billion
P/E Ratio	433.75	65.35
Earnings per Share	-0.033	2.536
Dividend Yield	0.00%	0.42%
Franking	–	100%

Note: Droneshield’s P/E ratio appears mathematically inconsistent with its negative earnings per share. This suggests the P/E may be forward-looking or based on adjusted earnings rather than trailing net profit.

Pro Medicus trades on a much lower P/E than Droneshield, though both are considered highly valued, especially when compared to classical “value” names. Pro Medicus also provides a small fully franked dividend, absent from Droneshield.

Recent share price momentum

Comparing recent share price performance up to 9 October 2026:

• Droneshield: Closed at $1.57 on 9 Oct 2026. Its year-to-date return is a rough -49.2%, with the past few weeks also showing persistent declines after a small spike in late September.
• Pro Medicus: Closed at $165.73 on 9 Oct 2026. Its year-to-date return is also in the red at -24.7%, but well ahead of Droneshield. The recent movement was positive, gaining 4.5% on the day, and showing several up days in the past fortnight.

Both have struggled year-to-date, but Pro Medicus has been the less volatile and better performing of the two over the period measured.

Which is the better buy?

If I need to pick just one as the stronger ASX growth stock, my lean is towards Pro Medicus. While Droneshield is tackling an exciting and rapidly evolving sector, its negative earnings, lack of dividends, and extreme valuation make it a riskier bet for now. Pro Medicus is far from cheap, but its profitability, fully franked dividends (even if small), positive earnings, and less severe drawdown this year all make it the stand-out for me between these two. There’s also proven history in scaling complex software, with stickier revenue and wide adoption in the US. I reckon Pro Medicus offers the higher-quality growth profile on the data at hand — which is what I want in my portfolio, even at a premium price tag.

The post Droneshield vs Pro Medicus: Which is the better ASX growth stock right now? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Could the DroneShield share price reach $2 in 2027?
• Here are the top 10 ASX 200 shares today
• Life360 vs Droneshield: Which ASX tech stock is a better buy?
• These 3 ASX shares have the ingredients of long-term compounders

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Analysts are just getting back into the swing of things after reporting season and the research reports are starting to flow.

I’ve picked out three companies that brokers have tipped for differing fortunes.

Let’s have a look.

Mesoblast Ltd (ASX: MSB)

Bell Potter published a research report last week which said that the outlook for Mesoblast’s short term revenue growth “remains highly attractive”.

There are also some pivotal events in the wings next year, including the interim readout on the clinical study for Mesoblast’s drug Ryoncil to be used in adults to treat graft versus host disease, and the headline data for a study of another compound in treating chronic lower back pain.

Bell Potter said:

Both are substantially larger markets than paediatric GvHD, nevertheless the market remains cautious. Australian biotech has had a difficult 12 months with several randomised clinical trials failing to meet clinical endpoints and we expect this has undermined investor confidence in the sector and is a contributing factor to the recent MSB share price.

The broker said the lower back pain drug could be a blockbuster in its own right, but the bar for approval was high.

They added:

Randomised controlled trials in pain management are difficult, however, the first Phase 3 in this indication achieved highly statistically significant reductions in pain from baseline. Since then patient selection criteria has been tightened and clinical endpoints refined in moves which we believe enhance the prospects for meeting the clinical endpoints in next year’s headline data readout.

Bell Potter has a $4.45 price target on Mesoblast shares compared to $1.98 currently.

Dicker Data Ltd (ASX: DDR)

Computer hardware company Dicker Data has just announced a deal to buy Sektor Group in New Zealand for $111.8 million.

Broker UBS said the motivation for the deal was to drive more growth in the southeast Asian region, “and further bolster its dominant Trans-Tasman offering within high margin technology”.

UBS said it was a positive incremental step for Dicker Data with the deal transacted at an attractive multiple.

The broker added:

Given the transaction consideration is entirely cash and no explicit management retention arrangements have been disclosed, retention of key personnel and vendor/ reseller relationships will be important to successful integration.

UBS has a neutral recommendation on Dicker Data shares and a $15.40 price target compared to $16.08 currently.

ASX Ltd (ASX: ASX)

Macquarie released a new research report into ASX, saying they were cautious on the company due to leadership transition and downside earnings risk from potential higher than expected capital expenditure.

The broker increased their price target from $52 to $53. However, it remains well below the current price of $61.10.

They also have an underperform rating on the company. At the time of writing, ASX is valued at $11.96 billion.

The post Buy, hold, sell: Mesoblast, Dicker Data, ASX shares appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Mesoblast, Transurban, NextDC shares
• Top brokers name 3 ASX shares to buy next week
• 2 ASX 200 shares tipped to rise 39% to 130%
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.