Earlier today I picked out three small cap shares which I think have very bright futures. You can read about them here.
Now I thought I would focus on a couple of shares which are a little larger in size. With market capitalisations approaching $1 billion, I would class these as mid cap ASX shares.
Though, this might not be for long, as I feel these companies have the potential to grow into much larger entities in the future. This could make them great long term investment options.
Here’s why I like them:
Electro Optic Systems (ASX: EOS)
The first mid cap share to look at is Electro Optic Systems. It is an aerospace company and the largest defence exporter in the Southern Hemisphere. It has a highly experienced team, high quality portfolio of products, and long-established partnerships with major global aerospace giants.
I believe a testament to the quality of its offering is a recent announcement by Electro Optic Systems. That announcement revealed that it has entered into contract negotiations with the Australian Government for 251 Remote Weapon Stations and related materiel. Together with its massive backlog of work, I believe this puts the company in a strong position to deliver solid earnings growth over the next few years.
Objective Corporation Limited (ASX: OCL)
Another mid cap ASX share to consider buying is Objective Corporation. It has a suite of software products that help government agencies and financial services organisation respond to information requests, provide secure file sharing, streamline and improve processes, and strengthen corporate governance practices. Given the nature of its offering, demand has remained strong during the pandemic and allowed it to deliver a very strong full year result.
Last week Objective revealed a 22% increase in unaudited net profit after tax to $11 million for FY 2020. This was driven by a 21% lift in annual recurring revenue to $56.6 million, which now represents 75% of total revenue. Next year the company’s growth looks set to continue and be given an additional boost from the recent acquisition of government regtech solution specialist Itree for $18.5 million. Management certainly believes this will be the case and expects “a material lift in revenue and profitability.”
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- 2 ASX shares I’d buy if the market crashes again
- Where to invest your first $500 into ASX shares
- Why the Electro Optic Systems share price fell 16% in June
- 3 ASX shares that could benefit from Australia and Japan deepening ties
- 3 ASX shares for the $270 billion defence plan
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 Electro Optic Systems Holdings Limited and Objective Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings 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.
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