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3 mid cap ASX shares to buy for strong potential returns

man standing with arms crossed in front of giant shadow of body builder representing asx growth shares
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On Tuesday I looked at a few small cap shares which I think could be top options for investors.

But if small caps are a little too high risk for your liking, you might want to take a look at the mid cap shares listed below.

I believe these shares have the potential to generate strong returns for investors over the long term:

Accent Group Ltd (ASX: AX1)

Accent is the footwear-focused retailer behind store brands such as HYPE DC, Platypus, and The Athlete’s Foot. It was a positive performer in FY 2020 despite the pandemic, delivering a 1.5% increase in sales to $948.9 million and a 7.5% lift in net profit after tax to $58 million. This was driven largely by a 69% increase in digital sales during the 12 months. They now account for 17% of total sales. While FY 2021 will certainly not be easy, Accent started the year in fantastic form. It reported a 16.6% increase in like for like sales during the first 8 weeks of the financial year. Looking beyond FY 2021, I believe the company is well-placed for growth thanks to the popularity of its brands, its strong market position, growing online business, and store expansion plans.

Bravura Solutions Ltd (ASX: BVS)

Another top mid cap share to consider buying is Bravura Solutions. It is a provider of software products and services to the wealth management and funds administration industries. Its shares have come under pressure recently after management warned that its earnings could be flat in FY 2021 because of the pandemic. While this is disappointing, I believe the pullback in the Bravura share price has created a buying opportunity. Especially given how well-positioned the company looks to accelerate its growth once the crisis passes. Bravura has a portfolio of high quality software solutions that have large addressable markets and blue chip customers.

Megaport Ltd (ASX: MP1)

Megaport is a provider of elastic interconnection services across data centres globally. This service allows its customers to increase and decrease their available bandwidth in response to their own demand requirements. This is an increasingly popular alternative to being tied to fixed service levels on long-term and expensive contracts. Megaport has been a very strong performer in recent years thanks to the expansion of its footprint and increasing demand for its offering. This led to its monthly recurring revenue (MRR) reaching $5.7 million at the end of FY 2020. This represents an increase of 57% year on year and equates to $68.4 million on an annualised basis. Pleasingly, it is still only a fraction of its sizeable market opportunity. And thanks to its leadership position, I expect it to capture a growing slice of it over the next decade.

These 3 stocks could be the next big movers in 2020

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.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

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 and recommends MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended Accent Group 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.

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