I think the mid cap space is a great place to look for buy and hold investment ideas.
This is because 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:
Collins Foods Ltd (ASX: CKF)
Collins Foods is a quick service restaurant operator which I think has strong long term growth potential. This is due largely to the expansion opportunity its KFC network has in the under-penetrated European market. In addition to this, the roll out of the Taco Bell brand across several Australian states could be a key driver of growth over the medium term. Overall, I believe the company is well-placed to grow both its earnings and dividend at a solid rate over the next decade. This could make it a very good buy and hold investment option today.
Costa Group Holdings Ltd (ASX: CGC)
This horticulture company’s performance has been very disappointing over the last 12 months. Over the period the company has downgraded its guidance countless times amid tough trading conditions and pricing pressures. And whilst I’m not overly convinced that the company is over the worst of its issues just yet, with its shares down by almost half this year, I think its current valuation makes it an attractive option for long-term focused investors. Especially given its strong growth potential thanks to its international growth strategy.
Nearmap Ltd (ASX: NEA)
A third and final mid cap share to consider is Nearmap. It is a leading aerial imagery technology and location data company which has operations in both the ANZ and North American markets. Nearmap has experienced increasingly strong demand for its services in both markets over the last couple of years, leading to impressive growth in its key Annualised Contract Value (ACV) metric. Thanks to quality of its product, the strong demand it continues to experience, and the launch of new products, I expect similarly strong ACV growth in FY 2020 and beyond.
And finally, here is another mid cap share that has the potential to become a large cap in the future.
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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and Nearmap Ltd. The Motley Fool Australia has recommended Collins Foods Limited. 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.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019