3 mid cap stars I would buy in August

I think in the mid cap side of the Australian share market there are many high-quality shares with strong long-term growth prospects that could make them great options today.

Three in particular that stand out at present are listed below. Here’s why I think they could be stars of the future:

Dicker Data Ltd (ASX: DDR)

This morning this founder-led computer software and hardware wholesale distributor announced yet another distribution deal, this time for the complete range of LG Commercial Display products. While it may not have a material impact on its revenue, I expect it to support the solid growth that the company has been exhibiting this year. This should put it in a position to continue increasing its dividend over the coming years, potentially making it one of the best dividend options in the mid cap space. This year management intends to increase its full-year dividend to a fully franked 18 cents per share, which means that its shares offer a yield of approximately 6% currently. Ltd (ASX: KGN)

Kogan is an e-commerce company that I think has a bright future ahead of it. It impressive sales growth and expansion into other verticals has really impressed this year and I expect it to build on this in FY 2019. While its growth came in a little slower than expected recently, it was still explosive. So with its shares down by around 50% from their 52-week high, I think that now could be an opportune time to consider snapping them up.

Macquarie Telecom Group Ltd (ASX: MAQ)

If you’d sold your Telstra Corporation Ltd (ASX: TLS) shares a year ago and bought Macquarie Telecom shares you’d not only have saved yourself from a 31% decline, you’d be up 40% as well. The good news is that I don’t think it is too late to do the switch and would suggest investors consider it in August. After all, Macquarie Telecom is a company that stands to benefit greatly from the cloud computing boom thanks to its Hosting (Cloud Services) segment. In the first-half of FY 2018 the segment grew its EBITDA by 38% to $13.4 million, meaning it now accounts for 59.5% of total EBITDA. With the shift to the cloud continuing to accelerate, I expect it to deliver similarly strong full-year growth.

Finally, here are three more mid cap shares I would buy in August as well.

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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 Dicker Data Limited and Telstra Limited. The Motley Fool Australia has recommended ltd. 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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