The Motley Fool

Should you buy Zip Co and these mid cap ASX shares in April?

One area of the market where I see a lot of great options for investors right now is the mid cap space.

At this side of the market I believe there are a number of quality companies with the potential to grow strongly over the next few years.

Here’s why I think the three mid cap shares listed below could be great options in April:

BINGO Industries Ltd (ASX: BIN)

I think this waste management company would be a great option at the current level, especially after it successfully completed its acquisition of rival Dial a Dump Industries. This acquisition will allow BINGO to be fully vertically integrated from collections to landfill and become the largest player in B&D waste in Sydney. In addition to this, the deal means the company has some much-needed diversification and is less exposed to residential construction and collections. Earlier this week Goldman Sachs added the company to its conviction buy list with a $2.40 price target.

Collins Foods Ltd (ASX: CKF)

Another mid cap share that I think would be worth considering is Collins Foods. It is an operator of quick service restaurants in Australia, New Zealand, and Europe. I believe the latter market will be the key driver of growth for the company over the next decade due to the under-penetration of the KFC brand there. Another driver could be the rollout of the Taco Bell brand across several Australian states. Late last year the company signed an agreement with Yum! Brands to open 50 new Taco Bell restaurants across multiple states in Australia between January 2019 and December 2021.

Zip Co Ltd (ASX: Z1P)

Zip Co is a provider of buy now, pay later services online and in store throughout Australia. I’ve been very impressed with its progress over the last 12 months and believe it is well worth considering a small investment. In the first half of FY 2019 Zip achieved record transaction volume of $495.2 million and a 114% increase in revenue to $34.2 million. This strong performance went down well with the market and allowed it to raise 42.8 million through an oversubscribed placement recently. These funds will be used to strengthen its balance sheet and allow the company to capitalise on growth opportunities, both organic and inorganic.

And here's a very exciting small cap share that has been tipped for big things this year.

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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods 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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