I’m a big fan of investing in the mid cap side of the market. This is because it generally offers greater potential returns that the large cap space, but comes with less risk than the small cap side of the market.
Three mid cap ASX shares that I would buy in February are listed below:
Jumbo Interactive (ASX: JIN)
Jumbo is an online lottery ticket seller and the operator of the Oz Lotteries website. Although there have been a few concerns over its slowing growth due to margin contraction, it is worth noting that this is due to its investment in its future growth. Furthermore, management expects its margins to return to normal levels in FY 2021. In light of this and its bold ticket sales targets, I’m confident its profit growth will be very strong over the next few years. Jumbo is aiming to achieve $1 billion in ticket sales through the Jumbo platform by FY 2022. This will be triple what it achieved in FY 2019.
Paradigm Biopharmaceuticals Ltd (ASX: PAR)
Paradigm is a biopharmaceutical company with a lot of potential thanks to its ZILOSUL product. ZILOSUL is the brand name of its repurposing of Pentosan Polysulfate Sodium (PPS). This is an FDA-approved drug that has been used safely for treating inflammation for over sixty years. Paradigm is focusing on repurposing PPS to treat osteoarthritis (OA). This is a market with over 31 million sufferers in the United States, which management estimates could be worth as much as US$27.9 billion per annum. Pleasingly, things look very promising for ZILOSUL. Its Phase 2b trial in OA successfully met primary, secondary, and exploratory endpoints.
Zip Co Ltd (ASX: Z1P)
Zip Co is a leading provider of buy now, pay later services online and in store. It has been growing at a very impressive rate over the last 18 months and has continued this strong form in FY 2020. Earlier this month it released its second quarter update and revealed further explosive growth. Zip Co achieved record quarterly transaction volumes of $562.6 million, which was up 85% year on year and 40% quarter on quarter. This was driven partly by a 24% quarter on quarter increase in customer numbers to 1.8 million. Thanks to its international expansion, its Amazon Australia deal, the launch of its business product, and the growing popularity of this payment method, I’m confident there will be more of the same over the remainder of FY 2020 and beyond.
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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 and recommends Jumbo Interactive Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Jumbo Interactive 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.