Shares in Telix Pharmaceuticals Ltd (ASX: TLX) are trading higher after the company announced good news out of China for its prostate cancer imaging compound, Illuccix.

The company said in a statement to the ASX on Tuesday that China’s National Medical Products Administration (NMPA) Center for Drug Evaluation (CDE) has accepted a new drug application (NDA) for Illuccix, which is Telix’s lead prostate cancer imaging agent.

The company said further:

The NDA was submitted with Telix’s strategic partner for the Greater China region, Grand Pharmaceutical Group Limited. Seeking a broad label that reflects clinical utility at multiple stages of prostate cancer care, the submission includes data from the Illuccix China Pivotal Phase 3 Registration study1, which reported positive top-line results in December 2025.

Telix said the China study met its primary endpoint, “with an overall patient-level positive predictive value of 94.8% for the detection of tumours in patients with biochemical recurrence of prostate cancer”.

This confirmed, the company said, that the compound worked in a comparable way in Chinese patients and non-Chinese patients.

Telix said the high predictive value was demonstrated even in patients with very low prostate-specific antigen readings “and across differing metastatic locations”.

More than two-thirds (67.2%) of patients experienced a change in their treatment plan as a consequence of (Illuccix) imaging compared with the initial plan at baseline, demonstrating a major impact on clinical decision-making in Chinese patients.

Major step forward

Telix Chief Executive Officer, Precision Medicine, Kevin Richardson, said it was a significant outcome for the company.

Submitting this New Drug Application for (Illuccix), the first for any of our products in China, is a major milestone for Telix and our partner Grand Pharma. Geographic expansion is core to the growth strategy for our precision medicine business, and China represents a strategically important market for Telix. We look forward to progressing regulatory approvals together with Grand Pharma and subject to NMPA approval, bringing our lead commercial imaging product to market in China to serve the needs of men living with prostate cancer.

Telix said more than 134,000 men were diagnosed with prostate cancer in China in 2022, with that number increasing by about 6% each year.

The company said that in line with Chinese government policy supporting wider geographic access to nuclear medicine, the number of cameras used in the Illuccix imaging process was expected to have surpassed 1600 by the end of 2025, up from 133 in 2010.

Illuccix has already been approved by the US Food and Drug Administration, Australia’s Therapeutic Goods Administration, the United Kingdom Medicines and Healthcare Products Regulatory Agency, and in 19 countries within the European Economic Area.

Telix shares were 3.7% higher at $11.70 in early trade.

Telix was valued at $3.82 billion at the close of trade on Monday.

The post Good news out of China has this drug company’s shares higher appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Telix Pharmaceuticals. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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.

Northern Star Resources Ltd (ASX: NST) shares are on the move on Tuesday.

In morning trade, the gold miner’s shares are up over 1% to a new record high of $28.05.

Why are Northern Star shares rising?

At the start of this month, Northern Star released an operational update which revealed that production would be well short of expectations due to a number of isolated negative events coinciding late in December.

This saw the gold miner downgrade its FY 2026 annual production guidance to between 1,600k ounces and 1,700k ounces from between 1,700k ounces and 1,850k ounces.

Negative events that impacted production include a primary crusher failure, recovery works taking longer than planned, and lower mined grades.

At the time, management warned that “lower gold sales across each of the three production centres are expected to impact cost performance.” However, it wasn’t in a position to update its cost guidance at that point. Until now.

Cost guidance update

This morning, Northern Star shares are rising after the company finally unveiled its updated cost guidance for FY 2026.

And judging by the share price reaction, it seems that the update was not as bad as the market was expecting.

Though, a strong rise in the gold price overnight amid increased demand for safe haven assets could be supporting its shares.

During the first quarter of FY 2026, Northern Star achieved an all-in sustaining cost (AISC) of A$2,522 per ounce. But due to the aforementioned issues in the second quarter, its AISC increased to A$2,937 per ounce. This brought its first half AISC to A$2,720 per ounce.

In light of this, according to the release, Northern Star’s FY 2026 full-year AISC guidance has been revised to A$2,600 to A$2,800 per ounce. This is up from A$2,300 to A$2,700 per ounce.

Management notes that this has been driven predominantly by lower gold sales and higher royalties from elevated gold prices. With respect to the latter, there will be an additional ~A$40 per ounce in royalties compared to previous expectations.

The company’s FY 2026 sustaining capital guidance of ~A$750 million remains unchanged. This corresponds to ~A$450 per ounce.

Despite its troubles in FY 2026, this hasn’t stopped Northern Star shares from rising almsot 65% over the past 12 months.

The post Northern Star shares hit record high on cost guidance update appeared first on The Motley Fool Australia.

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• ASX 200 materials sector outperforms as mining shares continue their ascent
• Why I think ASX 200 gold shares like Newmont and Northern Star will keep surging higher in 2026

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.

The Fletcher Building Ltd (ASX: FBU) share price is in focus today after the company announced the sale of its Construction Division to VINCI Construction for $315.6 million, with a possible increase to $334.1 million pending contract outcomes.

What did Fletcher Building report?

• Sale of Construction Division for $315.6 million, with additional contingent consideration of up to $18.5 million
• Transaction includes Higgins, Brian Perry Civil, and Fletcher Construction Major Projects
• Approximately 2,300 employees to transfer to VINCI Construction
• Fletcher Building to retain legacy project responsibilities and set aside provisions of $55 million to $65 million for future claims
• Completion subject to regulatory approvals, with expected finish before end of calendar 2026

What else do investors need to know?

The transaction marks a strategic shift for Fletcher Building, narrowing its focus to its core building products manufacturing and distribution businesses. The move is designed to simplify its portfolio, lower debt, and aim for better returns to shareholders.

Fletcher Building will continue to handle responsibilities tied to legacy construction projects, notably the New Zealand International Convention Centre, and operations in the South Pacific, which are part of a separate review. Provisions for future claims highlight ongoing obligations related to past contracts.

What did Fletcher Building management say?

Managing Director and CEO Andrew Reding said:

Over the past year we have been clear that Fletcher Building’s future lies in being a focused building products manufacturer and distributor, supported by a strong balance sheet and disciplined capital allocation. The sale of Fletcher Construction is a significant step forward in delivering that strategy, while continuing the work underway to simplify the portfolio, lower debt and improve shareholder returns.

What’s next for Fletcher Building?

Fletcher Building expects the sale to be completed before the end of calendar 2026, after receiving regulatory and other key approvals. The company will look to redeploy proceeds into its core operations and further strengthen its financial position.

The board’s ongoing review of South Pacific operations and continued management of historic legal and project responsibilities will also be in focus. Investors can watch for updates as Fletcher Building executes its simplified strategy in the coming year.

Fletcher Building share price snapshot

Over the past 12 months, Fletcher Building shares have risen 24%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Fletcher Building sells Construction Division to VINCI for $315.6 million 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.

This S&P/ASX 200 Index (ASX: XJO) stock has seen sharp volatility over the past year, with the share price swinging between $1.52 and $3.35.

Despite this, Mesoblast Ltd (ASX: MSB) shares are up 15% over the past 6 months, but down 9.9% over the past month. At the time of writing, the ASX 200 healthcare share is trading hands for 2.54% apiece, starting the week with a 3.8% loss.

That has pushed the stock to a two-month low, despite signs of progress with the US Food and Drug Administration (FDA).

So, has Mesoblast already peaked, or is there more upside ahead?

One step closer to breakthrough

After years in the doldrums, the ASX 200 healthcare stock surged back into favour in 2025. Investors powered the rally on renewed confidence in Mesoblast’s lead therapy, remestemcel-L, which targets inflammatory and immune-mediated diseases.

Mesoblast has spent more than a decade building a regenerative medicine platform aimed at severe conditions with few effective treatments. Now, the big bet on Mesoblast is if the ASX 200 stock is closing in on its first major commercial breakthrough.

Reduced opioid use

Mesoblast said on Monday that the US Food and Drug Administration has acknowledged positive results for its lead therapy. According to the release, the FDA indicated that the treatment reduced pain in patients suffering from chronic lower back pain caused by degenerative disc disease.

Regulators also noted that significant reductions in opioid use seen in at least one major trial could potentially feature on the product label. Mesoblast said many patients cut back or stopped opioid use for extended periods after treatment.

History of FDA setbacks

Despite the positive update, the ASX 200 stock fell. The shares have retreated to a two-month low, suggesting technical pressure and profit-taking after a strong rally late last year. Sentiment may also have been dented by the recent sale of about 640,000 shares by Executive Director Dr Eric Rose.

Despite Mesoblast’s positive FDA update, risks remain elevated. Mesoblast has consumed significant capital over its lengthy development path, repeatedly returning to markets to fund prolonged trials and regulatory work.

Its history of FDA setbacks has also tested investor patience. Even with approval, the company must still commercialise its therapy, scale sales, and compete in an increasingly crowded cell-therapy market.

Broker sentiment still bullish

Brokers, however, remain upbeat. The average 12-month price target for the ASX 200 stock stands at $4.14, suggesting 63% upside from current levels.

TradingView data shows that all covering analysts rate the stock a strong buy. Their targets range from $5.24, a potential gain of 106%, to $3.09, a possible gain of 21%.

The post This rising ASX 200 stock isn’t done yet – or is it? appeared first on The Motley Fool Australia.

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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 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.

There are not many ASX shares I’d trust as much as the two I’m about to talk about owning for decades.

There are many benefits to owning investments for a long time, including the power of compounding and avoiding paying taxes on capital gains.

I’ve already owned the businesses below for around a decade, and I expect they’ll be in my portfolio for many decades to come.

Rural Funds Group (ASX: RFF)

Food is one of the most important aspects of human life, so farms are an essential part of society. I think that will be the case for a very long time to come.

Rural Funds owns a portfolio of farms through its real estate investment trust (REIT) structure.

Its diversification strategy is proving effective for providing various sources of rental earnings. It’s invested in almonds, macadamias, cattle, vineyards and cropping.

It’s not likely to shoot the lights out, but it does have rental growth built into its tenancy agreements, with either fixed annual increases or inflation-linked increases.

The steady drum of rental growth can help increase the value of the farms and help fund higher distributions over time.

It’s currently trading at a large discount to its adjusted net asset value (NAV), which was above $3 in in FY25.

The ASX share is expecting to pay a distribution that equates to a yield of 5.6% in FY26. It seems to me like it will be a strong income pick for many years to come based on its history of passive income so far.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

The investment house is another ASX share name I’m planning to be in my portfolio for many years to come.

The business has already displayed excellent longevity – it has been listed for more than 120 years. It’s one of the ASX’s oldest companies.

It has managed to deliver impressive long-term returns thanks to its diversified portfolio. The business has built its asset base to be defensive and deliver good cash flow.

If a business is steadily growing its cash flow then it can increase its underlying value and fund larger dividends. That’s exactly what’s happening with Soul Patts over time.

Each year it adjusts and builds its portfolio, giving it more long-term earnings potential and adding diversification without reducing the potential.

It currently has a lot invested in resources, telecommunications, industrial properties, building products, swimming schools, electrification and agriculture. In 20 years, the ASX share’s portfolio may be quite different, but I imagine the appeal of the business will be just as high.

I’m particularly happy to own this business because of its steadily rising dividend payouts. It has increased its annual payout every year for the last 28 years. It currently has a grossed-up dividend yield of 3.8%, including franking credits, at the time of writing.

The post 2 ASX shares I’m planning to own until I’m 100 appeared first on The Motley Fool Australia.

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

The Fortescue Ltd (ASX: FMG) share price has risen by close to 30% in the last six months. It has been a great investment.

Let’s consider what the ASX mining share could achieve in the year ahead.

ASX iron ore shares are harder to predict than many other industries due to how unpredictable resource prices can be.

The iron ore price is heavily influenced by the demand from China – the Asian superpower is by far the main buyer of Fortescue’s production. Let’s look at how well the analysts think the business could perform in 2026 and how that would affect a $10,000 investment.

What could happen to the Fortescue share price?

Analysts have a view on what could happen to the share price over the next 12 months, which is called a price target.

While it’s exciting to know what analysts believe, I think it’s a good idea not to think of it as a guaranteed share price.

According to CMC Markets, of the ten recent ratings on the ASX iron ore share, there is one buy, five hold and four sell ratings. The average price target of those analysts is $20.72, suggesting a possible decline of 7.5% over the next year from where it is at the time of writing.

The most optimistic share price target is $23, suggesting a slight rise for the year ahead. However, the most pessimistic price target is $17, implying a possible decline of more than 20%.

How would this impact $10,000?

If the Fortescue share price falls by around 7.5% from the current valuation, which would represent a decline of around $750, the capital value would fall to $9,250. That would be disappointing for investors.

However, the forecast on CMC Markets also suggests the business could pay an annual dividend per Fortescue share of $1.105 in FY26, translating into a fully-franked dividend yield of 4.9%.

With a $10,000 investment today, that’d create $490 of cash passive income, offsetting some of the blow of a forecast decline. But, it’d still represent an overall decline of $260 in total shareholder return (TSR) terms.

The key for Fortescue shares will be what happens with the iron ore price.

What’s the view on the iron ore market?

Broker UBS recently gave some commentary on the outlook for the resource:

Iron ore: we expect prices to remain ~$100/t over the next six months with demand stable and incremental supply growth modest (Simandou is 2H weighted); medium term, we expect the market to move into surplus and prices to trend back to around the 90th percentile which we estimate at ~$90/t in 2027.

Simandou is a new iron ore project in Africa that is partly owned by Rio Tinto Ltd (ASX: RIO).

Profitability looks solid for Fortescue in FY26, though FY27 could see earnings reduce a little.

The post Forecast: Here’s what $10,000 invested in Fortescue shares could be worth next year appeared first on The Motley Fool Australia.

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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.

The Origin Energy Ltd (ASX: ORG) share price is in focus today after the company announced it will extend operations at the Eraring Power Station until April 2029, providing up to two more years of support for NSW’s electricity grid and further certainty for energy users.

What did Origin Energy report?

• Eraring Power Station operations extended from August 2027 to 30 April 2029
• No major maintenance overhauls planned ahead of revised closure
• Eraring Battery’s final stages expected online by early 2027, lifting storage capacity to 700MW/3,160MWh
• Extension aligns with existing NSW Government agreement and is not expected to impact 2030 emissions targets
• Eraring Community Fund remains in place to support local projects through 2032

What else do investors need to know?

The decision to keep Eraring Power Station open longer comes after Origin assessed customer needs, market conditions, and AEMO’s advice on system security risks in NSW. While renewables and new battery storage projects are progressing, Origin says continued coal-powered generation is needed to maintain reliable supply for homes and businesses over the transition.

Origin confirmed it will not invest in further major maintenance for Eraring ahead of the 2029 closure and reiterated its aim for net zero emissions by 2050. The company will keep supporting employees through its Future Directions program, which has already funded 525 training courses, and continue backing local communities around Eraring with its $5 million Community Fund.

What did Origin Energy management say?

Origin CEO Frank Calabria said:

Our decision to keep Eraring operating until April 2029 provides more time for renewables, storage and transmission projects to be delivered, and reflects uncertainty regarding the reliability of Australia’s aging coal and gas fleet. We are pleased to provide greater certainty for the community, our people and the market about Eraring’s future, and I want to commend the professionalism and focus of the Eraring team in continuing to maintain and operate the plant reliably given the vital role it continues to play for energy users in NSW.

What’s next for Origin Energy?

Origin has signalled that the extension should not derail the company’s climate goals, with scope remaining to meet its 2030 emissions reduction targets and longer-term net zero ambitions. After Eraring’s closure in 2029, Origin will focus on its large-scale battery and other clean energy assets at the site.

The final stages of the 700MW/3,160MWh Eraring Battery are due online in early 2027. This should deliver about 4.5 hours of storage, positioning Origin to play a key part in supporting NSW’s energy transition away from coal.

Origin Energy share price snapshot

Over the past 12 months, the Origin Energy share price has declined 1%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Origin Energy to keep Eraring Power Station running until 2029 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.

Australia’s electrification story is moving out of policy papers and into the real economy. 

Power networks are being upgraded, data centres are expanding, electric vehicles are becoming more common, and commercial buildings are getting smarter and more energy-intensive.

All of this requires one thing Australia cannot avoid: more electrical infrastructure. That creates demand for the businesses that supply equipment and deliver the work on the ground.

Here are two ASX-listed companies exposed to that trend from different angles.

IPD Group Ltd (ASX: IPG)

IPD Group sits in the supply chain for electrical and automation equipment. It distributes products used in power distribution, industrial systems, data centres, renewables, and mining operations.

In December, IPD Group announced the acquisition of Platinum Cables for $37.5 million upfront, with potential earn-out payments of up to $7.5 million tied to profit growth through to December 2026. Platinum Cables reported FY2025 revenue of $44.8 million and operating earnings (EBITDA) of over $8 million. IPD Group management also said the acquisition is expected to be earnings accretive by around 11.5% on a pro forma FY 2025 basis, before any synergies.

The acquisition expands IPD Group’s footprint in specialist electrical cabling, particularly in mining, infrastructure, and large-scale projects. Platinum Cables will continue operating as a standalone business, with its management team retained.

Beyond the deal itself, IPD Group has highlighted improving conditions across commercial construction and engineering work. Management recently pointed to growth in non-residential building activity and stronger momentum in engineering construction, alongside demand linked to data centres, EV charging infrastructure, and broader grid upgrades.

In simple terms, IPD Group benefits when Australia builds or upgrades the systems that move electricity safely and efficiently.

SKS Technologies Group Ltd (ASX: SKS)

SKS Technologies focuses on delivering the infrastructure rather than supplying the components.

The company provides electrical, IT, communications, and audio-visual services, handling everything from design and installation through to integration and ongoing maintenance. Much of its work is project-based, and management reports that around 94% of revenue comes from repeat customers.

In recent years, data centres have become a major part of the business. SKS Technologies has said data centre-related work made up more than half of FY2025 revenue, driven by large-scale investments from global technology companies. Revenue from data centre projects rose sharply, from $31 million in FY 2024 to over $140 million in FY 2025, according to company materials.

In May 2025, SKS Technologies secured a $100 million contract to deliver a third data centre facility in Melbourne for an international hyperscale operator, following earlier stages of the same development.

Most recently, SKS provided an update at its annual general meeting, where management outlined expectations for the year ahead. The company said it is estimating revenue of around $320 million, supported by a healthy project pipeline.

Why this tailwind matters for Australia

Australia cannot afford to stand still on energy and digital infrastructure.

Electricity demand is rising as transport, industry, and buildings become more electrified. At the same time, data usage continues to grow rapidly, driven by cloud computing, artificial intelligence, streaming, and enterprise digital systems. These trends place increasing pressure on power grids, backup systems, cooling, and network reliability.

Unlike discretionary spending, this infrastructure is essential. Businesses, households, hospitals, and governments all rely on it functioning smoothly. Delaying upgrades only increases future costs and risks.

What’s driving this long term

Several forces are at work:

• Electrification of transport and industry, including EV charging networks and electric machinery
• Data centre expansion, as Australia builds capacity to support digital services and AI
• Grid modernisation, to handle renewable energy, higher loads, and reliability requirements
• Urban growth and commercial construction, which increase baseline power needs

These are multi-decade trends rather than short-term cycles.

Foolish Takeaway

IPD Group and SKS Technologies operate in different parts of the same system, but both are linked to Australia’s need to build, upgrade, and maintain critical electrical infrastructure.

For investors interested in long-term national trends rather than short-term market themes, these types of businesses highlight how electrification shows up in the real economy.

The post 2 under-the-radar ASX small caps engineering Australia’s electrification push appeared first on The Motley Fool Australia.

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Motley Fool contributor Leigh Gant 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 Ipd Group. The Motley Fool Australia has positions in and has recommended Ipd Group. The Motley Fool Australia has recommended Sks Technologies Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Here at The Motley Fool, we have been covering extensively the economic conditions that have benefited Australian small caps recently. 

Bronwyn Allen covered earlier this month that ASX small-cap shares outperformed the larger players by almost 2.5 times in 2025. 

S&P/ASX All Ords Index (ASX: XAO) shares delivered total returns (capital growth plus dividends) of 10.56% last year.

Meanwhile, the S&P/ASX Small Ords Index (ASX: XSO) – tracks companies ranked 101 to 300 by market cap – delivered a total return of 24.96%.

Late last year, another report showed that investors were increasingly looking to capture opportunities across the full spectrum of the Australian equity market rather than concentrating exclusively on the blue-chip heavyweights.

A new report from VanEck Australia indicates that economic tailwinds could be coming for global small-cap companies. 

The case for global small caps 

According to VanEck Australia, we could be about to see a strong surge in global small caps. 

The report said that with markets forecasting two rate cuts in 2026 to stimulate demand, quality small companies could benefit should faster economic growth eventuate. 

These kinds of assets have historically outperformed during expansionary environments.

Additionally, global small companies are trading at historically low levels. 

The speculative 2024/25 rally led by mega-caps, notably the “Magnificent Seven” resulted in the relative underperformance of global small-caps, compared to the broader small-cap market as measured by the Russell 2000 over the past two years.

The report said the speculative rally has led to strong outperformance of low-quality small companies. This has come as investors sought those companies that may have been positioned to benefit from the rise of AI, with less consideration of profitability. 

However, with political uncertainty, geopolitical risks, and inflation concerns flaring up again, speculative assets have started to come under pressure during the last quarter of 2025. 

If these market conditions persist, we could experience an uptick in market volatility in 2026 despite overall economic growth remaining strong. Taking history as a guide, this backdrop bodes well for a quality rotation within the global small companies complex.

According to VanEck, valuations for global small caps are reasonable/attractive relative to global large caps (MSCI World Index), with valuations at 25-year lows.

How to gain exposure to global small-cap companies?

Based on the report from VanEck, a continued easing of tariff policy could support a shift toward a manufacturing-led expansion in the US economy. This is an environment in which high-quality small-cap stocks have historically outperformed the broader market.

Further, markets are forecasting two more rate cuts in 2026. This is typically positive for small-caps, as cheaper access to credit enables them to grow their businesses.

We think the small size of these companies means that double digit growth is potentially more achievable as they are coming off a lower base than large caps.

Global quality small-caps could shine in 2026.

For investors looking to capture exposure to small-cap companies based outside of Australia, there are a few ASX ETFs to consider:

• VanEck MSCI International Small Companies Quality ETF (ASX: QSML) – 150 international developed market small cap quality growth securities. 
• Vanguard MSCI International Small Index ETF (ASX: VISM) – provides exposure to more than 3000 small companies listed in major developed countries. 
• Global X Russell 2000 ETF (ASX: RSSL) – Tracks approximately 2,000 companies that represent the smallest constituents of the Russell 3000 Index. 

The post Why the small-cap renaissance is only just beginning: Expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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.

Telstra Group Ltd (ASX: TLS) shares are an interesting investment consideration in the current economic climate.

The ASX telco share is by far the leader in Australia’s telco space, with the widest network coverage, the most subscribers, and the most useful spectrum assets to deliver a strong service to customers.

Warren Buffett’s track record at Berkshire Hathaway is impressive, as he has chosen a number of stocks that have generated excellent long-term returns. Let’s consider whether he’d like Telstra shares.

Is the ASX telco share an appealing buy?

The Omaha investor has previously said that one of his favourite types of investments is a monopoly because of the economic moat and having no serious competitors.

Telstra does have some competition in Australia, such as Optus, TPG Telecom Ltd (ASX: TPG), Superloop Ltd (ASX: SLC), Aussie Broadband Ltd (ASX: ABB), Aldi Mobile, and more.

But, I’d say Telstra has a stronger market position than leaders in industries like banking or mining.

That market position has given Telstra the confidence to regularly increase prices for subscribers. While that may slow growth, it maximises revenue and helps increase margins.

Telstra also provides the network for a number of smaller challengers that focus on value, so if those telcos gain subscribers, Telstra can win here too.

Would Warren Buffett buy Telstra shares?

Broker UBS thinks the company’s net profit and dividend can increase each year between FY26 and FY30, which is a strong tailwind for shareholder returns in the coming years.

UBS wrote in a note earlier this month:

We have a Neutral [rating] on TLS. TLS is trading on 8x FY26e EBITDA, offering 4% dividend yield which we view justified for 8% DPS [dividend per share] CAGR over next 3yrs, with upside should we see greater price rises and Intercity Fibre revenue coming online faster than anticipated.

Based on the projection on CMC Markets, Telstra shares are valued at 24x FY26’s estimated earnings. That may not be the lowest price-to-earnings (P/E) ratio the business has traded at over the last few years, but it could be reasonable given the ongoing earnings growth in the coming years.

But Warren Buffett hasn’t shown much interest in materially investing in telecommunications businesses during his stellar investing years.

So, while Telstra shares are an attractive investment in my view, it’s probably not going to be one that delivers an average total shareholder return of 20% per year over the next decade or two from where it is today.

The post Would Warren Buffett buy Telstra shares? appeared first on The Motley Fool Australia.

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• How to turn ASX dividends into long-term wealth
• DIY investors: How to build a stable income portfolio starting with $50,000
• Why Telstra and these ASX dividend shares could be top buys

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 Aussie Broadband and Berkshire Hathaway. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Aussie Broadband and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.