One part of the local share market which I think is a great place to look for long term investment ideas is the mid cap space.
I like this side of the market as I believe it offers stronger potential returns than the large cap side of the market, but carries less risk than the small cap side.
With that in mind, here are three mid cap ASX shares that I think could be good long term options:
Bubs Australia Ltd (ASX: BUB)
Bubs is a quick-growing infant formula and baby food company which could be worth a closer look. I've been hesitant to invest in the company over the last couple of years due to the way it was burning through its cash at an alarming rate. However, this appears to have come to an end now. In its recent third quarter update, Bubs revealed record quarterly revenue of $19.7 million (up 67%) and positive operating cashflow of $2.3 million. This left it with a cash balance of $36.4 million. If it can continue this solid form in FY 2021, then I suspect its shares will be heading notably higher.
Megaport Ltd (ASX: MP1)
Another mid cap share that I think is worth considering is Megaport. It is a leading provider of elasticity connectivity and network services in a total of 601 data centres globally. Although its shares have just hit an all-time high, I think there's still plenty of upside for them over the next decade. Especially given the increasing demand it is experiencing for its services. In the first half of FY 2020, Megaport delivered a 26% jump in annualised revenue to $54.6 million. And with demand for its services likely to continue increasing because of the cloud computing boom, I believe it is well-placed for further strong growth over the coming years.
Zip Co Ltd (ASX: Z1P)
A final mid cap share to consider is buy now pay later provider Zip Co. Like its rival Afterpay Ltd (ASX: APT), Zip Co has been growing at an astonishing rate over the last couple of years. This has been driven by the increasing popularity of the payment method with both consumers and retailers. In FY 2019 Zip Co reported a massive 108% lift in transaction volume and a 138% increase in revenue. This positive form has continued in FY 2020 with Zip Co recently reporting a 96% increase in third quarter revenue to $45 million. Looking to the future, I believe the company still has a long runway for growth thanks to new verticals and its international expansion.
