One of the worst performers on the Australian share market on Tuesday was the Pro Medicus Limited (ASX: PME) share price.
A day before being added to the illustrious S&P/ASX 200 index, the healthcare technology company's shares finished the day 15% lower at $25.37.
Things were looking even worse for the company at one stage. Pro Medicus' shares actually dropped over 21% to $23.38 during afternoon trade before recovering slightly.
Why was Pro Medicus down 21%?
Investors were quick to hit the sell button on risky assets after the trade war between the United States and China escalated and sparked fears of a slowdown in global economic growth.
The catalyst for this was China's decision to retaliate to President Trump's 10% tariff on US$300 billion worth of Chinese goods. It allowed its currency to devalue and halted purchases of U.S. agriculture products.
And with Pro Medicus' shares changing hands on ultra-high earnings multiples, its shares were always likely to be hit hard if the market went into a mini meltdown.
Though, it is worth noting that even after this massive pull-back, Pro Medicus' shares are still up over 133% since the start of the year.
Is this a buying opportunity?
Whilst I think it would be best to wait for the dust to settle before diving in, I do believe that this is a buying opportunity for investors that are willing to make a buy and hold investment.
After all, I continue to believe that the company is capable of growing its earnings at an above-average rate long into the future thanks to the quality of its software and its massive market opportunity.
Also falling heavily for similar reasons on Tuesday were Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO). They ended the day 5.5% and 6% lower, respectively. Once again, anyone investing with a long term view might want to consider picking up these two shares once the market volatility eases.
