If small cap ASX shares are out of your comfort zone but you're looking for strong potential returns, then you might want to consider mid cap shares.
At this side of the market I believe there are a number of well-established companies that can grow materially in the future.
Two that I would buy are listed below. Here's why I like them:
Collins Foods Ltd (ASX: CKF)
I think this quick service restaurant operator would be a great option in the mid cap space. It is one of the largest operators of KFC stores in the world with a growing footprint in Australia and Europe. At present, it operates 240 KFC restaurants in Australia and 41 in Europe. It also has 12 Taco Bell restaurants in Australia.
While its immediate growth is likely to come from the Australian market, I believe long term the European market will be the key driver of growth. Especially given the under-penetration of the KFC brand in Germany and the Netherlands. In addition to this, management has suggested that it will consider acquisitions in the market if opportunities arise.
Jumbo Interactive (ASX: JIN)
Another mid cap ASX share to consider buying is Jumbo Interactive. It is an online lottery ticket seller and best known as the operator of the Oz Lotteries website. While this website is the company's cash cow at present, I believe its Powered by Jumbo SaaS business will soon take the mantle. This business provides lotteries with the ability to sell tickets online through its platform.
It has a massive opportunity thanks to the shift to online lottery playing. Management notes that it has a US$303 billion global total addressable market, with just 7% of this market online at the moment. And thanks to the quality of its SaaS business, I believe it has the potential to win a meaningful slice of this market over the next decade.
