I think the mid cap space is a great place to look for buy and hold investment ideas.
This is because I believe there are a good number of shares that have the potential to grow strongly over the next decade, potentially generating outsized returns for shareholders.
Three mid cap shares that I would buy this month are listed below:
Bravura Solutions Ltd (ASX: BVS)
It certainly has been a busy year for this fast-growing provider of software solutions for the wealth management, life insurance, and funds administration industries. After failing in its takeover approach for GBST, the company has made two successful acquisitions. Bravura picked up Midwinter for $50 million and FinoComp for $25 million. Both businesses are expected to bolster its offering and open it up to new and lucrative markets. I expect this to complement the growth of its increasingly popular Sonata wealth management platform.
Nearmap Ltd (ASX: NEA)
One of my favourite mid cap shares is Nearmap. It is a leading aerial imagery technology and location data company which has operations in both the ANZ and North American markets. It has been experiencing very strong demand for its services in both markets over the last couple of years, leading to impressive growth in its key Annualised Contract Value (ACV) metric. Pleasingly, this solid demand shows no signs of slowing, leading to management recently guiding to further strong ACV growth in FY 2020.
Paradigm Biopharmaceuticals Ltd (ASX: PAR)
This biopharmaceutical company is certainly a higher risk option, but I believe the risk/reward on offer makes it worth considering. This is due to the massive market opportunity its ZILOSUL drug has. ZILOSUL is the brand name of its repurposing of Pentosan Polysulfate Sodium (PPS). Paradigm is focusing on repurposing PPS to treat osteoarthritis, which is a market with over 31 million sufferers in the United States alone. Trial results have been very positive, which has allowed Paradigm to strengthen its balance sheet greatly. At the last count the company had a cash balance of ~$75 million. I believe these funds should comfortably see Paradigm through to a commercial launch, if it gets that far.
Where to invest $1,000 right now
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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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia has recommended Bravura Solutions 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.