One of the best areas of the market to look for growth shares in my opinion is the mid cap space. I think in this area there are a large number of shares that have the potential to grow into much bigger entities over the next decade.
Here’s why I think these three shares could be among the best mid cap growth shares on the market right now:
Bapcor Ltd (ASX: BAP)
Bapcor is Australia’s leading auto parts company best known for its national network of Burson and Autobarn stores. It recently announced the acquisition of five businesses that are expected to strengthen its position as a supplier of parts to small and medium-size commercial vans and trucks. I think this was a smart move by management and believe it could be a key area of growth for the company in the coming years due to the growing number of delivery trucks on the road handling online shopping deliveries.
Bellamy’s Australia Ltd (ASX: BAL)
In December 2017 Bellamy’s applied for the SAMR accreditation required for it to sell its infant formula products on the China mainland. Over one year later the company has still not received this accreditation and its sales are likely to be flat in FY 2019 if it isn’t granted in the near future. As you might expect, this has caused a sharp selloff of its shares over the last few months. While this is obviously very disappointing for shareholders, I believe it has created a buying opportunity for non-shareholders. Especially with management confident that it is on a path to increase its sales to at least $500 million by FY 2021. This compares to sales of approximately $330 million in FY 2018.
Helloworld Travel Ltd (ASX: HLO)
Another mid cap share to consider is Helloworld. I think the integrated travel company is well positioned to profit from the inbound and outbound tourism boom. It has been experiencing strong demand for its offering over the last couple of years, leading to some stellar profit growth. This looks set to continue in FY 2019 with management confident that it will deliver earnings growth in the range of 16.5% and 23% in FY 2019. This should put the company in a position to increase its dividend once again. Based on its guidance, I estimate that its shares offer a fully franked forward 3.4% dividend yield today.
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. 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.