I'm a big fan of investing in the mid cap space because I believe there are a good number of shares at this side of the market that have the potential to grow to be large caps in the future.
Three mid cap shares that I think have large cap potential are listed below. Here's why I like them:
Afterpay Touch Group Ltd (ASX: APT)
Afterpay Touch is the company behind the Afterpay interest free buy-now-pay-later platform that is disrupting the traditional credit card industry. I've been very impressed at the start the company has had in the U.S. market and believe it is well-positioned to replicate its Australian success in the world's biggest retail market. In the first six months of operation in the United States the company has signed up 900 retailers, 300,000 consumers, and handled US$115 million of sales through its platform.
Bravura Solutions Ltd (ASX: BVS)
This fintech company is another mid cap star that I believe has a lot of potential. The main reason for this is the company's increasingly popular Sonata wealth management platform. Its strong growth in recent years means the platform has become the company's biggest contributor to earnings. And given its long runway for growth, I expect it to continue to underpin the company's overall growth for many years to come. So with its shares now changing hands at a little under 30x earnings, I think it is well worth considering an investment.
Webjet Limited (ASX: WEB)
Webjet is a fast-growing online travel agency that I believe would be a great long-term investment. Due to its global footprint, the seismic shift to online booking, and its popular brands, Webjet has grown its earnings at an explosive rate over the last decade. The good news is that this strong form is expected to continue in FY 2019. Management recently confirmed that it expects to deliver underlying EBITDA of at least $110 million from its existing operations this year, which will be a year on year increase of approximately 26%. It is worth noting that this does not include the contribution from its recent Destinations of the World acquisition.
