One of my favourite areas of the market to look for long-term investment options is the mid cap space.
At this side of the market I believe there are a number of quality companies that have the potential to grow into large caps over the next decade.
Three top mid cap shares that I would buy this month are listed below:
Altium Limited (ASX: ALU)
Altium is an award-winning printed circuit board (PCB) design software provider which has over 30 years of continuous research and development in PCB design. It is aiming to use this experience to achieve market leadership in PCB design by 2020. I feel confident that the company will achieve this, putting it in a strong position to generate above-average earnings growth over the coming years. In addition to this, the company's Octopart business could underpin its growth. Octopart is a search engine for electronic and industrial parts and has a significant market opportunity.
NEXTDC Ltd (ASX: NXT)
NEXTDC is one of Australia's leading data centre operators with a portfolio of world class centres in strategic locations throughout the country. Due to the increasing amount of data that consumers and businesses are generating, demand for data centre services has been growing at a rapid rate over the last few years. So much so, NEXTDC has seen customer numbers increase by a compound annual growth rate of 49% and interconnections by a compound annual growth rate of 76% over the last five years. I remain confident that this will remain the case over the next decade, putting NEXTDC in a position to deliver strong long term earnings growth. However, a lot of this future growth has already been priced in, making its shares a high risk option.
SEEK Limited (ASX: SEK)
The SEEK share price has underperformed over the last 12 months due to management's guidance for FY 2019. Although it expects revenue to increase 16% to 20% year on year, its profits are expected to be flat. While this guidance is extremely underwhelming, it is worth noting that this is due to the job listings company investing heavily in its future growth. I remain confident these investments will make the company stronger and position it for solid long term growth. As a result, I think it is well worth seizing on this share price weakness if you're willing to make a patient long term investment.
