Category: Stock Market

The Telix Pharmaceuticals Ltd (ASX: TLX) share price is charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) diagnostic and therapeutic product developer closed on Friday trading for $14.64. In early morning trade on Monday, shares are swapping hands for $15.39 apiece, up 5.1%.

For some context, the ASX 200 is down 0.8% at this same time.

Here’s what’s catching investor interest.

Telix share price jumps on collaboration deal

The Telix share price is charging higher after the company announced it has entered into a strategic collaboration with United States based biotech giant Regeneron Pharmaceuticals Inc (NASDAQ: REGN) for cancer treatment.

The agreement will see the companies work together to jointly develop and commercialise next generation radiopharmaceutical therapies.

Management said the 50/50 cost and profit-sharing model combines Telix’s radiopharmaceutical development and manufacturing capabilities with Regeneron’s antibody discovery platforms and oncology experience.

The collaboration will include multiple solid tumour targets from Regeneron’s portfolio of antibodies. The companies said they also intend to develop radio-diagnostics to support patient selection and treatment response assessment.

The new agreement could see Telix earn development and commercial milestone payments of up to US$2.1 billion (AU$3.0 billion). The ASX 200 healthcare company will receive US$40 million upfront from Regeneron for four initial programs enabling access to its radiopharmaceutical manufacturing platform.

Telix reported that it could also earn “low double-digit royalties” if it opts out of co-funding any program.

What did management say?

Commenting on the collaboration with Regeneron that’s helping to boost the Telix share price today, Telix CEO and managing director Christian Behrenbruch said:

The collaboration with Regeneron reflects a highly complementary set of capabilities and a unique opportunity to explore what true ‘next gen’ biologics-based radiopharmaceuticals can potentially do for patients.

We are well positioned to work toward the shared goal of advancing next generation precision radiopharmaceuticals for patients with hard-to-treat cancers.

Israel Lowy, senior vice president clinical development unit head Oncology at Regeneron, said, “Telix brings deep expertise in radiopharmaceutical development and infrastructure that complements Regeneron’s antibody technologies and oncology portfolio.”

Lowy continued:

Regeneron is excited to enter the targeted radiopharmaceuticals space and explore the utility of these agents either as monotherapy or rationally combined with our immunotherapy platform, particularly in areas of high unmet patient need such as lung cancer, where our PD-1 inhibitor is a global standard of care.

John Lin, senior vice president of oncology & antibody technology research at Regeneron, added, “Targeted radiopharmaceuticals represent a rapidly emerging frontier in oncology and an exciting opportunity to bring new treatment options to patients in need.”

With today’s intraday lift factored in, the Telix share price is up 35.5% in 2026, racing ahead of the 1.9% year to date gains posted by the benchmark index.

The post Telix share price leaping higher today on $3 billion US news appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Telix Pharmaceuticals announces US$40m Regeneron radiopharma deal
• Why Amaero, Mesoblast, Telix, and Tivan shares are charging higher today
• Why Magellan, Telix and Fortescue shares are grabbing headlines on Friday
• Should you buy Telix shares after its big US news?

Motley Fool contributor Bernd Struben 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 Regeneron Pharmaceuticals and Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

What’s better than buying ASX growth shares? Investing in them after they’ve suffered a large decline, at much better value.

It can make a big difference to invest in high-growth businesses when they sell off because of the much bigger change in the price/earnings (P/E) ratio.

For example, if a business with a P/E ratio of 10 falls by 10%, the ratio drops to 9. If a business had a P/E ratio of 50 and it fell by 10%, the P/E ratio would become 45.

With that in mind, the two businesses below look like great value to me.

REA Group Ltd (ASX: REA)

REA Group is the leading property portal company in Australia, with its realestate.com.au business, which sees significantly more visitors than competitors in terms of both property vendors and potential buyers. This market strength allows the business to charge more than rivals and increase prices regularly.

With Australia’s growing population and increasing number of properties, the company’s addressable market is steadily growing. The recent (and potential upcoming) RBA rate hikes may lead to an increase in property listings, which could boost earnings

The potential of AI hurting the ASX growth share’s earnings is not as strong as the market has priced in, in my view, as AI could assist REA Group’s earnings in a variety of ways on both the income side and the expense side. Plus, AI adoption by households may not become as widespread as expected (if that ends up being a headwind).

After falling around 40% since August 2025, the REA Group share price is now valued at 33x FY26’s estimated earnings, according to CMC Invest.

Siteminder Ltd (ASX: SDR)

Siteminder is another technology company, it provides software for hotels for their operations and to generate revenue through room sales and distribution.

The company has a really impressive goal of 30% annual revenue growth, which most businesses would be very happy with. Not only is the company winning more hotel customers, but it’s unlocking more revenue from existing clients by providing more modules.

These additional offerings allow the hotel to analyse their data and finances more effectively so they can decide what price to charge for their rooms. Siteminder can even change the hotel’s room prices automatically for them.

The operating leverage of a software business means that costs don’t grow at the same speed as revenue, so I’m expecting Siteminder to see its various profit margins (and bottom line) to improve significantly in the next few years.

Following the Siteminder share price’s decline of 60% in the past six months, it now looks very good value to me. According to the projection on CMC Invest, it’s valued at 24x FY28’s estimated earnings.

The post 2 ASX growth shares to buy now while they’re on sale appeared first on The Motley Fool Australia.

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• The ASX 200 shares I think smart investors are buying after the tech selloff
• Could these ASX stocks double by the end of 2026?
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• How to invest $1,000 per month in ASX shares and build long-term wealth

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

Like so many other ASX tech shares, CAR Group Ltd (ASX: CAR) has had a rough run. The ASX tech share is down 24% year to date and has plunged 36% over the past six months.

That’s a sharp reversal for a company that delivered strong results, yet still got caught in the broader tech sell-off.

After trading around $40 in August 2025, the share price has steadily slid to $23.36 at the time of writing.

So, what’s going on and could this be an opportunity?

Let’s break it down.

A dominant market position

CAR Group isn’t just another tech stock. It operates leading online automotive marketplaces across multiple regions, including Australia and key international markets.

These platforms benefit from powerful network effects. Buyers go where the listings are. Sellers go where the buyers are. That creates a self-reinforcing cycle and a strong competitive moat.

Once established, these marketplaces are incredibly hard to displace.

Attractive margins

This is also a high-margin business.

Digital marketplaces don’t carry the same heavy costs as traditional businesses. Once the platform is built, additional users and listings come at relatively low incremental cost.

That scalability helps drive strong margins and consistent cash generation, exactly what long-term investors want to see in an ASX tech share.

A long runway for growth

Perhaps the biggest drawcard for the ASX tech share is the growth runway. Globally, automotive sales are still shifting online. In many regions, penetration remains relatively low, giving CAR Group plenty of room to expand.

As more dealers and private sellers move online — and as digital advertising becomes the norm — the company stands to benefit.

In other words, this isn’t just a mature business. It’s still growing into its opportunity.

So why the sell-off?

The recent decline looks less about fundamentals and more about sentiment.

Tech stocks broadly have been under pressure, with investors rotating away from growth and reassessing valuations. CAR Group has been caught in that downdraft, despite continuing to execute.

Of course, this ASX tech share is not risk-free.

Competition remains a factor, particularly in global markets where local players can be strong. Economic slowdowns could also impact vehicle sales volumes, which in turn affects listings and advertising demand.

And like all tech stocks, CAR Group is sensitive to shifts in market sentiment and interest rates.

What next for the ASX tech share?

Morgan Stanley reiterated its buy rating last week, although it trimmed its 12-month price target from $38 to $32.

Across the broader market, sentiment remains firmly positive. According to TradingView data, 14 out of 16 analysts rate the stock as a buy or strong buy.

The average price target sits at $34.90, implying upside of nearly 50% from current levels.

Foolish Takeaway

CAR Group’s share price has taken a hit. But the business itself still looks strong.

With a dominant position, attractive margins, and a long growth runway, this ASX tech share could be one to watch, especially while sentiment remains weak.

Because if confidence returns, this could be a very different story a year from now.

The post Here’s why this $9 billion ASX tech share could be a buy right now appeared first on The Motley Fool Australia.

More reading

• 5 ASX 200 shares that could be a bargain right now
• 5 things to watch on the ASX 200 on Monday
• 7 ASX 200 shares just upgraded to strong buy ratings
• This ASX 200 stock just hit a multi-year low. Here’s what’s behind the slide
• 3 ASX 200 shares at 52-week lows: Buy, hold, or sell?

Motley Fool contributor Marc Van Dinther 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 CAR Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Champion Iron Ltd (ASX: CIA) shares are edging lower on Monday, even after the miner confirmed completion of its European expansion into Norway.

In morning trade, the Champion Iron share price is down 0.76% to $5.19. The decline comes as broader ASX weakness weighs on sentiment after weekend peace talks between the United States and Iran failed to produce an agreement.

That wider risk-off move appears to be dragging the stock lower alongside the market, despite what is otherwise a strategically positive acquisition update.

The company’s completion of the Rana Gruber deal is still likely helping limit the downside, with the shares remaining up about 23% over the past 12 months.

European expansion deal officially closes

According to the release, Champion has finalised the settlement of its recommended cash offer for Rana Gruber, completing the acquisition.

The deal was completed at NOK 79 per share, valuing Rana Gruber at roughly NOK 2.93 billion, or close to US$290 million based on the original terms announced in December.

This gives Champion ownership of a long-life iron ore asset in Norway with direct access to European customers and exposure to premium high-purity concentrate products.

Rana Gruber currently produces more than 1.8 million tonnes per year of high-grade iron ore. It has also been progressing a 65% Fe product upgrade, which aligns with growing demand for cleaner steel inputs.

Why the deal may be limiting the downside

The deal adds a second operating hub alongside Champion’s flagship Bloom Lake mine in Quebec.

It means the company is no longer relying on just one operating region. It also gives it established customer relationships across Europe, where green steel supply chains are becoming a bigger long-term focus.

Management also noted that the transaction is expected to be earnings, EBITDA, and cash flow accretive on a per-share basis in the near term.

That may be helping keep the sell-off relatively modest today, even as broader market weakness drags most ASX stocks lower.

At current levels, Champion is valued at roughly $2.79 billion and trades on a dividend yield above 4%.

Foolish Takeaway

Champion’s latest rise indicates investors see the Rana Gruber acquisition as a genuine growth move.

The move expands its premium iron ore exposure into Europe, adds diversification beyond Canada, and strengthens its position in lower-carbon steel supply chains.

If management delivers on its expected earnings uplift, this deal could end up being one of the bigger moves in the ASX materials space this year.

Personally, I would still only allocate a small portion of funds here, as I prefer ASX businesses with broader growth drivers and less reliance on iron ore pricing.

The post Why this ASX 200 iron ore stock is holding up in today’s sell-off appeared first on The Motley Fool Australia.

More reading

• Champion Iron finalises acquisition of Norway’s Rana Gruber
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Aaron Teboneras 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.

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Domino’s Pizza Enterprises Ltd (ASX: DMP) continues to be the most shorted ASX share after its short interest remained flat at 15.3%. Short sellers appear to have doubts that the pizza chain operator’s turnaround strategy will succeed.
• Telix Pharmaceuticals Ltd (ASX: TLX) has short interest of 14.6%, which is up since last week. Unfortunately for short sellers, this radiopharmaceuticals company’s shares stormed higher last week after the US FDA accepted its NDA for Pixclara
• Polynovo Ltd (ASX: PNV) has 14% of its shares held short, which is down since last week. This high level of short interest may be due to valuation concerns. The medical device company’s shares are trading on high earnings multiples.
• Guzman Y Gomez Ltd (ASX: GYG) has short interest of 13.7%, which is down week on week. Unfortunately for short sellers, this quick service restaurant operator’s shares rocketed last week after it reported a big improvement in its performance.
• Treasury Wine Estates Ltd (ASX: TWE) has seen its short interest rise to 12.5%. This wine giant is struggling due to consumer spending pressures and distributor disruption.
• Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 12%, which is up slightly week on week. Short sellers may believe that travel demand could be impacted by the Middle East conflict.
• Boss Energy Ltd (ASX: BOE) has short interest of 11.7%, which is down since last week. This uranium miner’s production outlook beyond 2026 is uncertain and attracting short sellers.
• Nanosonics Ltd (ASX: NAN) has short interest of 11.6%, which is down slightly since last week. This infection prevention technology company’s recent performance has been disappointing. Short sellers don’t appear confident a change is coming.
• DroneShield Ltd (ASX: DRO) has 11.5% of its shares held short, which is up since last week. Last week, this counter drone technology company announced the sudden exit of its CEO and chair.
• Zip Co Ltd (ASX: ZIP) has entered the top ten with short interest of 11.2%. Later this week, the buy now pay later provider will be releasing its third-quarter update. Short sellers appear to believe it could disappoint.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

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• Why I’d buy BHP and DroneShield shares next week
• Top brokers name 3 ASX shares to buy next week
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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, DroneShield, Nanosonics, PolyNovo, Telix Pharmaceuticals, and Treasury Wine Estates and is short shares of DroneShield. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Flight Centre Travel Group, Nanosonics, PolyNovo, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX passive income stock Rural Funds Group (ASX: RFF) could be one of the most underrated businesses in Australia within the S&P/ASX 300 Index (ASX: XKO).

I’m not expecting it to generate massive capital growth in the next year or two, but the farmland real estate investment trust (REIT) looks like a great buy right now.

There are two reasons why I think it’s a great buy today, so I’m going to outline them below.

Strong income potential

Owning REITs is a great way to own commercial property, receive passive income and potentially see capital growth too.

The business hasn’t given investors a payment cut since it started paying to investors more than a decade ago. Most of those years saw the business increase its distribution by 4% per year. Despite the headwind of higher interest rates, it has been able to maintain its payout at 11.73 cents per unit in the last couple of financial years.

The business is expecting to maintain its annual payout at 11.73 cents per unit in FY26, which translates into a distribution yield of 5.8%.

I like that the ASX passive income stock has a weighted average lease expiry (WALE) of more than a decade, as it means the business has rental income locked in for a long time, giving both security and visibility for investors.

Additionally, I like that the business has a diversified farming portfolio across a number of sectors including cattle, almonds, macadamias, vineyards and cropping. Diversification is both a powerful way to reduce risks and find other opportunities.

Finally, I like that the business has rental growth built into most of its contracts, with those either being fixed annual increases or the growth is linked to inflation, plus market reviews.

Very undervalued?

One of the most useful ways to roughly value a REIT is based on the net asset value (NAV). That tells investors what its business is worth including the property values, the loans, cash and so on.

We can’t truly know what the properties are worth exactly unless Rural Funds actually sells them, so the NAV is just an approximate value that is updated every six months.

The latest update from the business was its FY26 half-year result, which noted that the ASX passive income stock’s adjusted NAV per unit was $3.10.

At the current Rural Funds unit price, it’s trading at a 35% discount to that latest value, at the time of writing, which makes me think this is a great time to buy for the long-term.

The post Is this one of the best ASX passive income stocks to buy right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Insignia Financial Ltd (ASX: IFL) share price is in focus as shareholders today considered a proposed $4.80 per share, all-cash acquisition by CC Capital Partners, representing a 56.9% premium to the last closing price.

What did Insignia Financial report?

• CC Capital Partners made a binding offer of $4.80 cash per Insignia Financial share.
• The offer values Insignia Financial at approximately $3.3 billion.
• The scheme price is a 56.9% premium to the 11 December 2024 closing share price of $3.06.
• Independent Expert Kroll Australia valued Insignia Financial shares at $4.49–$5.08, with the offer price sitting in this range.
• The board unanimously recommends the scheme, with all directors intending to vote their shares in favour.

What else do investors need to know?

The scheme is the result of a competitive process, during which the board received eight proposals from three parties, with CC Capital’s bid being the highest and final binding offer. Regulatory approvals have already been satisfied, but completion still depends on shareholder and court approval, as well as no material adverse events before implementation.

If approved, Insignia Financial shares will be suspended from trading from 17 April 2026, with scheme payment scheduled for 28 April 2026 to shareholders on record as of 21 April 2026. If not approved, Insignia Financial will remain listed on the ASX as a standalone company.

What’s next for Insignia Financial?

The final vote today determines whether the scheme will proceed. If shareholders and the court give the green light, shareholders will receive the agreed $4.80 per share in late April, and Insignia Financial will be acquired by Daintree BidCo, an entity established by CC Capital Partners.

No superior proposal has emerged, and the Independent Expert’s opinion remains supportive. Shareholders are encouraged to review the Scheme Booklet in detail and check the company website for ongoing updates across key dates.

Insignia Financial share price snapshot

Over the past 12 months, Insignia Financial shares have risen 30%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 15% over the same period.

View Original Announcement

The post Insignia Financial shareholders consider $4.80 per share CC Capital takeover appeared first on The Motley Fool Australia.

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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.

A2 Milk Company Ltd (ASX: A2M) shares are on the slide on Monday morning.

In early trade, the ASX 200 stock is down 18% to $7.57.

Why is this ASX 200 stock crashing today?

The infant formula company’s shares are under pressure today following the release of a trading, supply chain, and outlook update.

According to the release, while demand for its products remains strong, A2 Milk is experiencing significant supply chain disruptions that are expected to impact its FY 2026 performance.

The ASX 200 stock revealed that it is currently facing temporary product availability issues in China, particularly for its China label infant milk formula (IMF) products.

These issues have been driven by a combination of factors, including strong demand, freight disruptions, production constraints, and longer product release and customs clearance times.

Management notes that freight capacity has been impacted by the Middle East conflict, while production has been constrained due to earlier manufacturing challenges and a backlog of orders.

As a result, the company expects these issues to materially impact product availability during the fourth quarter, particularly across April and May.

Guidance downgraded

Due to these challenges, A2 Milk has downgraded its FY 2026 outlook, putting significant pressure on its shares.

The ASX 200 stock now expects revenue growth in the low to mid double-digit range, which is down from its previous guidance of mid double-digit growth.

In addition, EBITDA margins are now expected to be between 14% and 14.5% in FY 2026. This compares to its prior guidance of 15.5% to 16%.

As a result, the company’s net profit after tax is now expected to be similar to or lower than in FY 2025, whereas previously it had been forecast to grow.

Cash conversion is also expected to fall significantly to around 50%, down from prior expectations of 80%.

Commenting on the situation, the ASX 200 stock said:

While the supply chain impacts are primarily timing-related and one-off in nature, their cumulative effect is now expected to impact the Company’s performance against FY26 guidance, noting their potential impacts are challenging to mitigate at this stage in the financial year due to proximity to year end and end-to-end supply chain lead times.

Notwithstanding these short term challenges, the Company intends to continue to reinvest in the business in 4Q26 to support brand health, growth and long term value creation.

The post Why are A2 Milk shares sinking 18% today? appeared first on The Motley Fool Australia.

More reading

• The a2 Milk Company lowers FY26 guidance amid supply chain challenges
• Why A2 Milk, BWP, Core Lithium, and Newmont shares are sinking today
• 5 things to watch on the ASX 200 on Thursday

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 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.

Pro Medicus Ltd (ASX: PME) shares are catching the eye of investors on Monday.

In morning trade, the health imaging technology company’s shares are up 2% to $129.80.

This compares favourably to the performance of the ASX 200 index, which is down 0.6% at the time of writing.

Why are Pro Medicus shares charging higher?

Investors have been bidding the company’s shares higher today after it announced another major contract win.

According to the release, its wholly owned U.S. subsidiary, Visage Imaging, has signed a five-year contract renewal with Northwestern Medicine.

It notes that Northwestern Medicine is a premier academic health system based in Chicago, featuring top-ranked hospitals, including Northwestern Memorial Hospital, and over 200 sites across Illinois.

It is also the primary teaching affiliate for the Northwestern University Feinberg School of Medicine.

The contract is valued at $37 million and is for its leading Visage 7 Viewer. Importantly, management highlights that the renewal has been negotiated with increased minimums and an increased fee per transaction. This should be a big confidence builder given how some bears believe that artificial intelligence (AI) will drive down the prices that software companies can command.

It also notes that the contract is transaction-based with potential upside beyond the $37 million.

Commenting on the news, Pro Medicus’ CEO, Dr Hupert, said:

We are extremely pleased that in addition to committing to a second five-year term at an increased fee per exam, NM have also committed to an increase in their minimums reflecting the growth in their exam volumes since standardising on our platform five years ago.

In the last month we have contracted nearly $80 million in renewals maintaining our track record when it comes to client retention. This underpins our belief that our solution provides unparalleled return on investment from both a financial and clinical perspective.

Busy period

As mentioned above, this is the second contract announcement in as many weeks.

Last week, Pro Medicus signed a five-year contract with the University of Maryland Medical System that is worth $23 million.

That contract, also based on a transactional licensing model, will see the company’s cloud-based Visage 7 Enterprise Imaging Platform implemented across the University of Maryland Medical System, providing a unified enterprise imaging platform for diagnostic interpretation.

The post Why are Pro Medicus shares outperforming the market on Monday? appeared first on The Motley Fool Australia.

More reading

• Pro Medicus locks in 5-year, $37m Northwestern Medicine contract renewal
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• How I’d invest $15,000 in ASX shares right now
• $2,000 to invest? 3 ASX shares to consider today
• Sell alert! Why this expert is calling time on Domino’s and Pro Medicus shares

Motley Fool contributor James Mickleboro has positions in Pro Medicus. 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.

I was listening to an audiobook by comedian Jimmy Carr over the weekend.

In it, amongst the jokes and advice, was a reminder of a quote I’ve long appreciated, from basketball legend, Michael Jordan:

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed”

Now, writers like nothing better than a nice little sports metaphor. They’re understandable, and relatable.

No, sorry, there’s no ‘but’ here.

I like them, too.

I mean, they’re not perfectly analogous, for more than a few reasons, but they’re also not not analogous.

And I particularly like them as an investing analogy when it comes to the topic of Jordan’s quote: failure and success.

I’ve used a football match as an analogy before, to illustrate something similar.

See, even the best teams miss tackles.

Even the best teams concede tries and goals.

Even the best teams lose games.

Even the best teams have losing streaks.

Even the best teams have poor seasons.

It goes further, though.

The best teams often aren’t the best teams for long stretches.

Sometimes years on end.

See, they’re not the best teams because they never lose. They’re the best teams because they lose less often – and therefore win more often – than the other teams, on average, over a long period of time.

Oh sure, there’s a ‘best team’ in each competition, right now. They’re the ones on top of the respective ladders/tables.

There is a ‘best team’ of the last year, too.

And the last five years.

Though at this point, it gets kinda arguable.

Go to 10 years and you have the making of a weekend afternoon-long debate.

But statistically, I reckon you can still pick, if not the best single team, the best two or three.

And when you do, you’ll find something really interesting.

You stop talking about this weekend’s game. Or last year’s premiers.

You start talking about teams (clubs, really, because most players will have moved on inside a decade) that have something different.

Not the best player (though that helps) or the right tactics (ditto).

You end up talking about the structural stuff that matters more. That allows success to be enduring. No, not always ending in a premiership every year, but an approach that makes success more likely than not, and that delivers an above average performance, over the long term.

If your preferred sport doesn’t have a salary cap, you’re thinking about their financial firepower. If it does, things like the ‘back office’, club culture and other non-monetary differentiators come to mind.

But those all fall under ‘strategy’ not ‘tactics’. The aim is of course to win as many battles as possible, but the broader aim is to win the war.

(The only thing that rivals sports metaphors? Military ones. Let the court-martial begin. Guilty as charged!)

The strategy that makes long term success more likely will almost certainly also result in more individual games being won. But not all of them.

And it won’t deliver success every year, either.

But, considered carefully, codified cleverly, and executed faithfully, the right strategy will earn more than its fair share of success.

Which is where I want to return to investing.

Warren Buffett didn’t have many bad years, in six decades in charge of Berkshire Hathaway (I own shares). But he had some.

Not because his strategy was wrong, but because sometimes the circumstances were such that it didn’t prevail in the short term.

During the dot.com boom, index investors left Buffett’s returns for dead. Tech investors did even better. But he didn’t change his approach. He didn’t abandon his strategy.

He just accepted that it wasn’t delivering in the short term, during that time.

Over time? You won’t be surprised to know that Buffett had the last laugh.

The key was not trying to adjust his approach just because he’d had a few losses in a row.

It was the opposite: sticking to what he was convinced would work in the long term.

Not being scared, impatient, impulsive or listening to those, like the headline writer, who (in)famously asked ‘What’s Wrong, Warren?’.

It can’t have been easy. I mean the man is Warren Buffett for goodness sake. He’s the bloke with the reputation as the ‘Oracle of Omaha’.

So publicly trailing the market must have been really tough.

No-one likes to be perceived as – or to feel like – a loser.

Just ask those footy teams who punt their coaches or managers a few games into a new season.

It’s madness, of course: this was apparently the right bloke only 6 weeks ago, and now he’s totally unsuited to the role? Really?

Generously, maybe the club bosses just realised they made an error appointing (or reappointing) the bloke as coach.

Realistically? They just hated losing (who doesn’t?) and couldn’t trust the(ir own!) process. They just felt like they had to do something. Anything!

They would, in all likelihood, make terrible investors.

If you buy shares, and sell them six weeks later because they’re not ‘winning’ yet, you’re not an investor. You’re not even a gardener. You’re barely a house painter!

I’m not sure what outcomes in life you can reliably expect will unfold in six weeks, especially when you’re competing against others – and the fickle finger of fate – but I suspect there aren’t many, and they’re unlikely to be consequential.

The real successes, though? The long term ones?

Almost without exception they come from understanding what combination of factors tend to result in long term success, then doing those things, repeatedly, consciously, faithfully, over time.

Even though the results may not be known for years.

And… accepting that they won’t always be enough.

Crucially, though, remembering that at those particular times, a  kneejerk change of course will probably feel better (‘Just make the pain stop, please!’), but probably at the expense of long term success.

Or, at the very least, leaving that success up to chance, on the basis that if you change enough, often enough, maybe, eventually, you’ll get lucky.

That’s not how the good teams building winning cultures, or long term success.

Jordan didn’t change his technique every time he missed a shot… even when he cost his team a game.

Oh, sure he constantly tried to learn and improve, but that, itself, is a strategy.

But also, while bitterly disappointed, he trusted the process. Remember the last sentence of that quote:

“… I’ve failed over and over and over again in my life. And that is why I succeed”

He didn’t succeed because of a lack of failure. He succeeded because of that failure.

I can’t tell you how many would-be or one-time investors I’ve heard of, or from, who bought one, or two, or three stocks and, dejected because they weren’t immediate successes, threw the whole thing away.

(I do know they’re the vocal ones on social media or in chat rooms, telling anyone who’ll listen that ‘this whole thing is a scam’!)

They don’t realise how close they got. And what they’re throwing away because they missed a single game-winning shot.

Jordan never stopped chasing perfection. But he didn’t let falling short turn him into a quitter.

The missed tackles are annoying. The game losses are dispiriting. The years of relative underperformance are mentally and emotionally taxing.

But, if you have the right strategy, and you can commit to seeing it through despite – especially through – the tough times, you’ll usually do very, very well, over the long term.

It is, not surprisingly, the same in investing.

You can invest like a panicked football club boss.

Or you can invest like Michael Jordan.

And the choice you make will make all the difference.

Fool on!

The post What the basketball GOAT can teach investors appeared first on The Motley Fool Australia.

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