If small caps are too high on the risk scale for your tastes, then you might be better off looking at the mid cap space. These companies are lower down the risk scale but still have the potential to generate outsized returns for investors in the future.
With that in mind, I have picked out two mid caps that are highly rated right now. Here's what you need to know about them:
Bravura Solutions Ltd (ASX: BVS)
The first mid cap ASX share to look at is Bravura. It is a leading provider of software solutions for the wealth management and funds administration industries.
Bravura has a portfolio of solutions that are both high quality and have significant market opportunities. This includes the popular Sonata wealth management platform, which allows financial advisers to connect and engage with clients via computers or smart devices.
In addition, the company's portfolio includes FinoCamp, Midwinter, and Delta Financial Systems. FinoCamp builds unique and highly flexible software that supports the UK wealth market, Midwinter is a financial planning software provider, and Delta Financial Systems provides technology to power complex pensions administration in the UK market.
After a couple of years of significant headwinds from Brexit and COVID-19, Bravura looks to be back on the right path again. It recently reaffirmed its guidance for FY 2021 net profit after tax of $32 million to $35 million and second half revenue growth of 10% half on half.
Goldman Sachs is a fan of the company. It currently has a buy rating and $3.90 price target on its shares. The broker believes it has a massive growth opportunity in the UK and ANZ markets.
Hipages Group Holdings Ltd (ASX: HPG)
Another mid cap ASX share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider that connects tradies with residential and commercial consumers. The Hipages platform not only helps tradies grow their businesses by providing job leads, it also allows them to communicate with customers and run general admin duties.
At the last count, over three million Australians had used Hipages, providing more work to over 34,000 trade businesses subscribed to the platform.
Goldman Sachs is also very positive on the company and sees it as a great long term option. It highlights that the company currently captures around 5% of total industry advertising spend. However, it sees scope for this to increase to 40% to 60% in the future as the company builds out its ecosystem.
Goldman Sachs recently put a buy rating and $3.40 price target on its shares.
