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3 mid cap ASX growth shares to buy for strong long term returns

tech growth shares

One side of the share market which I think is a great place to look for investment ideas is the mid cap space.

In this area 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: Ltd (ASX: KGN)

I think that this fast-growing ecommerce company could be a good mid cap share to consider buying. I believe Kogan is well-positioned to benefit from the recent closure of retail stores nationwide because of the coronavirus. I expect this to lead to strong sales and earnings growth in FY 2020 and also in FY 2021 if it can leverage its growing customer base. Another positive is that recent share price weakness means its shares now offer an attractive dividend yield. Based on its last close price, I estimate that its shares provide a fully franked forward 3% dividend yield.

Megaport Ltd (ASX: MP1)

Another mid cap growth share to consider buying is Megaport. It is a leading provider of elasticity connectivity and network services in a total of 317 data centres globally. Demand for its services has been growing at a very strong rate, leading to solid customer and revenue growth. In the first half of FY 2020 its expanding footprint led to a 13% increase in customer numbers to 1,679 and an 26% jump in annualised revenue to $54.6 million. And with demand for its services continuing to increase because of the cloud computing boom, I believe it is well-placed for further strong growth over the coming years.

Pro Medicus Limited (ASX: PME)

Pro Medicus is a leading provider of a full range of radiology IT software and services to hospitals, imaging centres, and healthcare groups worldwide. The software company has experienced strong demand for its offering again this year. For the six months ended December 31, it posted a 15.7% increase in revenue to $29.3 million. And thanks to the benefits of scale, the company’s profits grew even quicker. Underlying profit before tax jumped 45.3% to $14.8 million and net profit after tax rose 32.7% to $12.1 million. Given the quality of its products and its sizeable market opportunity, I believe Pro Medicus is capable of growing its earnings at an above average rate over the next decade.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

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 MEGAPORT FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended ltd and Pro Medicus Ltd. The Motley Fool Australia has recommended 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.

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