I think a little exposure to the mid cap side of the market can be a very good thing for a portfolio.
This is because at this side of the market there are a good number of shares that have the potential to grow strongly over the next decade and generate outsized returns for investors.
Three fast-growing mid cap ASX shares I would buy are listed below:
Bravura Solutions Ltd (ASX: BVS)
Bravura is a provider of software solutions for the wealth management, life insurance, and funds administration industries. I think it is one of the best options in the mid cap space due to its popular Sonata wealth management platform. This high quality platform has a sizeable global market opportunity and looks well-placed to capture a big slice of it. In addition to this, recent acquisitions of Midwinter and FinoComp are expected to bolster its offering and open the company up to new and lucrative markets.
Helloworld Travel Ltd (ASX: HLO)
Helloworld is an integrated travel company which has been performing very strongly in recent years. Pleasingly, this strong form has continued in FY 2020. In the first quarter Helloworld reported first quarter EBITDA growth of 7.7%. This strong start led to management upgrading its EBITDA guidance from between $83 million and $87 million to between $86 million and $90 million. This compares to FY 2019’s $77.3 million. Despite this growth, its shares are only changing hands at 15x trailing earnings.
Megaport Ltd (ASX: MP1)
Megaport is an elasticity connectivity and network services company. This service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements. The service continues to grow in popularity and it isn’t hard to see why. It allows user to consume the bandwidth they need when they need it, rather than be tied to fixed service levels on long-term and expensive contracts. And with larger and larger amounts of computer infrastructure going from local servers to cloud providers like Microsoft’s Azure, Amazon’s AWS, and Google Cloud, Megaport looks well-placed to benefit.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
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, Helloworld Limited, and MEGAPORT FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd, Helloworld Limited, and MEGAPORT FPO. 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.