MENU

Why I want these mid cap stars in my portfolio

I think in the mid cap part of the Australian share market there are a good number of high-quality shares with strong long-term growth prospects.

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

Bapcor Ltd (ASX: BAP)

Bapcor, formerly known as Burson Auto Parts, is one of Australia’s largest suppliers of car parts and accessories and has a growing footprint across the Australian and New Zealand markets. It was a strong performer in FY 2018 and posted pro forma net profit after tax growth of 31.6% to $86.5 million thanks to positive performances from all business segments. The highlight for me was its Wholesale segment which posted a 37.7% increase in EBITDA. The good news is that I feel confident that this strong form can continue in FY 2019 thanks to its expansion plans and organic growth.

Lovisa Holdings Ltd (ASX: LOV)

While this fast-growing fashion accessories retailer delivered a strong result in FY 2018, it wasn’t as strong as some investors had hoped and its shares have pulled back meaningfully since. They are, however, still up 86% since this time last year. Despite this, I believe this pullback has created a buying opportunity for investors and feel Lovisa’s successful international expansion still has a significant runway for growth. So, with its shares now changing hands at 26x estimated forward earnings, I think they are fairly priced given its positive growth profile.

Macquarie Telecom Group Ltd (ASX: MAQ)

Another mid cap share that I think would be a great buy and hold option is this data centre, cloud, cyber security, and telecom company. I’ve been very impressed and the way the company’s Cloud Services segment has quickly become its biggest contributor to earnings and expect it to be an even bigger contributor in the future due to its plans to expand its data centre capacity significantly. I expect this expansion to put the company in a great position to capture the growing demand for data centre services brought about by the cloud computing boom.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

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. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.