Why I would buy these mid cap growth shares in June

I believe there are a large number of high-quality mid cap growth shares on the Australian share market right now that would be great long-term investments.

Two that tick a lot of boxes for me are listed below. Here’s why I like them:

Bapcor Ltd (ASX: BAP)

Bapcor is one of Australia’s largest suppliers of car parts and accessories. Although its shares have recently risen to an all-time high, I don’t think it is too late to invest if you are willing to make a patient buy and hold investment. This strong rise does mean that its shares are now changing hands at approximately 30x full-year earnings. Which is of course a premium to the market average but given its recently reaffirmed guidance for 30% pro forma net profit after tax growth from continuing operations, makes them about fair value in my opinion.

And while there have been concerns that the rise of electric vehicles would be a major negative for Bapcor, management doesn’t seem to see things this way. It doesn’t expect electric vehicles to account for 50% of the cars on Australian roads until 2041. And even when that happens it is well placed to supply electronic components and batteries through its electrical and electronics wholesale businesses. Furthermore, the company has recently expanded into the Asian market. If this is a success, it could ensure that the company’s prospects remain bright long into the future.

Helloworld Travel Ltd (ASX: HLO)

I think that Helloworld is a great mid cap alternative to travel agent giant Flight Centre Travel Group Ltd (ASX: FLT). Like Flight Centre, Helloworld surprised the market with a stellar first-half result that came in ahead of expectations. Thanks to the growing popularity of its integrated service offering, the travel agent delivered a 39.2% increase in net profit before tax to $26 million.

Based on this strong first-half performance and its outlook, I estimate that Helloworld will deliver earnings per share of 27 cents in FY 2018. This means that its shares are changing hands at just 17x forward earnings today, whereas Flight Centre’s shares are trading at a lofty 23x estimated full-year earnings. For this reason, I would choose Helloworld over its illustrious rival.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of Helloworld Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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