One area of the market that I continue to believe has some quality options for investors is the mid cap space.
Three mid cap ASX shares which I think could provide strong returns for investors over the next decade are listed below. Here's why I like them:
Bravura Solutions Ltd (ASX: BVS)
One of my favourite mid cap shares is this provider of software products and services to the wealth management and funds administration industries. It was a strong performer in the first half of FY 2019, growing revenue by 24% to $127.4 million and EBITDA by 28% to $23.8 million. A key driver of this growth was the company's Sonata wealth management platform. Its increasing popularity led to the Wealth Management segment growing EBITDA by 36% during the half. Pleasingly, due to the quality of the product and its sizeable market opportunity, I expect more of the same in the second half and beyond.
Citadel Group Ltd (ASX: CGL)
Citadel Group is a leading software and services company that specialises in secure information management in complex environments. Whilst the market responded negatively to its first half results due to slowing top line growth, I believe this was an overreaction and has created a buying opportunity. Citadel is transitioning its sales focus towards scalable solutions that provide annuity revenue streams. This resulted in a 39.1% increase in SaaS revenue to $16.8 million during the half and means the segment now accounts for just over a third of total revenue. I expect it to be a key driver of growth over the next decade.
Zip Co Ltd (ASX: Z1P)
Another mid cap share which I think has a bright future ahead of it is Zip Co. It is a provider of buy now, pay later services online and in stores throughout Australia. Whilst Afterpay Touch Group Ltd (ASX: APT) gets a lot of attention from investors, I think Zip Co is deserving of a mention after its equally impressive progress. 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. Due to the addition of a number of blue chip retailers to its platform and the rapid adoption of buy now, pay later services with consumers and merchants, I believe it is well-positioned to continue its growth over the coming years.
