I think the mid cap side of the market is home to a good number of companies that have the potential to grow at a strong rate over the next decade and provide market-beating returns for investors.
Three top mid cap shares to consider are listed below. Here’s why I like them:
Kogan.com Ltd (ASX: KGN)
Although it has had a few wobbles over the last couple of years, I feel confident that Kogan is now back on the right path. This was evident in FY 2019 when the ecommerce company overcame a weak start to the year to finish it with gross sales of $551.8 million and NPAT of $17.2 million. This was a 12% and 21.9% increase, respectively, on the prior corresponding period. The good news is that the positive momentum has been carried over into FY 2020, with the company recording gross sales growth of 18.3% and gross profit growth of 32% during the month of July. I expect more of the same over the remainder of the year, especially given the successful launch of Kogan Marketplace.
Nearmap Ltd (ASX: NEA)
Nearmap is a leading aerial imagery technology and location data company which has been a very impressive performer in recent years. This strong form continued in FY 2019 when strong demand for its services in both the ANZ and North American markets led to Nearmap reporting record annualised contract value (ACV) of $90.2 million, which was a 36% increase year on year. The company also revealed improvements in its churn levels and the more than doubling of its Lifetime Value metric to $1.2 billion. Due to its sizeable market opportunity, new product launches, and potential expansions, I believe Nearmap can continue its strong growth for some time to come.
Zip Co Ltd (ASX: Z1P)
The shares of this buy now pay later platform provider have been on fire in 2019 and it isn’t hard to see why. In FY 2019 Zip Co reported a 108% lift in transaction volume to $1,128.5 million and a 138% increase in revenue to $84.2 million. This was driven by an 80% increase in customer numbers to 1.3 million, a 54% jump in partner numbers to 16,000, and a whopping 154% increase in transactions processed to 4.8 million. The good news is that management appears confident this strong growth can continue and is aiming to almost double both its active customer numbers and annualised transaction volume in FY 2020.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Kogan.com ltd. 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.