Many analysts cover the large stocks of the share market. There are few earnings or valuation surprises in that zone.
However, you don't need to visit the microcap portion of the ASX to find shares that are growing at a pleasing rate each year, that don't receive much coverage. For example, here are three mid cap stocks that are doing good things for shareholders:
Collins Foods Ltd (ASX: CKF)
Collins Foods is best known for being a large franchisee of Australian KFCs, this side of the business is generating modest underlying growth each year.
However, it has two other areas of the business where it could create good growth over the coming years. The first exciting part is that it has started acquiring KFC restaurants in Germany and the Netherlands. It's not like European KFCs are wildly successful, but this has created a huge new region of potential targets which it could acquire.
The other exciting part to Collins is that it has opened its first Taco Bell in Australia and has plans to open several more. The first Taco Bell has proven to be very popular with consumers.
Collins is currently trading at 18x FY17's earnings.
Reece Ltd (ASX: REH)
Every Australian would know Reece as Australia's leading bathroom supplier. Bathrooms are expensive yet an important part of every home. All of the new homes being built benefits Reece's bathroom business.
However, I particularly like the irrigation and civil construction parts to Reece's business. Farmers want to find every last bit of efficiency, so Reece's irrigation products are valued. There is an enormous amount of infrastructure and new properties being built, its civil business provides products for water mains, sewer mains, gas mains, telecommunications, electrical and fire services.
Tassal Group Limited (ASX: TGR)
Tassal is Australia's largest fish business with a big salmon farming operation in Tasmania and a large seafood wholesale operation.
The business has generated steady growth of underlying profit over the past five years and hopefully this can continue as Australians move towards a healthier diet by eating more fish.
Tassal is currently trading at 13x FY18's estimated earnings.
Foolish takeaway
It wouldn't surprise me to see all three business continue to grow steadily over the coming years due to Australia's growing population. At the current prices I would pick Tassal because of how low its price/earnings ratio is and how high its dividend yield is.
