If you’re looking for growth shares then I think the mid cap side of the market is a great place to start.

At this side of the market there are a good number of companies with the potential to grow materially in the future.

Three to consider buying are listed below:

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is a ~$1.1 billion fintech company which provides software and services to the wealth management and funds administration industries. The key product in Bravura’s portfolio for me is the Sonata wealth management platform. This software is used to connect and engage with clients anytime, anywhere, via computers, tablets or smartphones. I expect demand for the platform to continue to grow and drive strong earnings growth in the coming years.

Bubs Australia Ltd (ASX: BUB)

Bubs is a $605 million infant formula and baby food company. It has come a long way in recent years and now sees its products stocked in hundreds of Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) supermarkets across the country. Thanks to this and growing demand from China, I’m optimistic the company has now reached a scale which will make its operations more and more profitable in the coming years. As a result, I think it could be a great long term option for investors.

Kogan.com Ltd (ASX: KGN)

Another option to consider is $840 million ecommerce company, Kogan. I believe Kogan has the potential to grow very strongly in the coming years thanks to the popularity of its offering and the ongoing shift to online for shopping. At present only ~10% of consumer spending is online, but this is likely to grow materially over the next couple of decades. I expect Kogan to be one of the biggest winners from the shift.

More reading

• 1 ASX growth company I’d buy with $2,000
• 3 ASX retail shares to own for the next 20 years
• $2,500 invested in these 3 ASX shares could make you a fortune in 10 years
• The Bubs share price is up 20% in May, will it catch up to the A2 Milk share price?
• 2 millionaire-maker ASX internet growth shares

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 Bravura Solutions Ltd and BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Bravura Solutions Ltd and BUBS AUST 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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Is China about to blow up the dividends of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG)?

What has happened with China?

According to reporting by the Australian Financial Review, China is changing the supervising rules for inspecting iron ore.

The worry is that China could cause major disruptions to Australia’s iron ore exports. It could mean Australian iron ore gets checked but Brazilian imports don’t have the same checks.

But BHP isn’t worried about it and actually thinks it could lead to a quicker process. Fortescue also confirmed it was part of a process that has been in the works for years.

Plenty of people are linking Australia’s support for a coronavirus inquiry to a potential backlash by China. We have already seen the Asian superpower put tariffs onto Australian barley.

If China were to put tariffs onto Australian ore, or stop buying altogether, then it could be devastating for the dividend and profit of BHP, Rio Tinto and Fortescue. Indeed, state and federal governments would feel the effects of it too. Let’s hope China doesn’t do anything else. 

What have the miner share prices done?

At the time of writing, the BHP share price is slowly down (after being up in the morning), the Rio Tinto share price is down 0.3% and the Fortescue share price is down 2.3%.

It’s this type of event that could cause the mining environment to dramatically shift. The outlook for miner dividends is (was?) good, but things can change quite rapidly if demand for iron or the price of iron goes down.

I wouldn’t own a miner for dividends, just for the theoretical expected profit generation (and valuation of those cashflows). I’m not interested in owning miner shares and this news puts me off even more.

More reading

• Why ASX 200 iron ore miners are your best bet for dividends right now
• Why these ASX shares have just stormed to record highs
• Here’s why the Fortescue share price hit an all-time high today
• Macquarie picks the best stocks to buy for the post COVID-19 rebound
• Could ASX 200 iron ore shares save the Australian economy?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The Qantas Airways Limited (ASX: QAN) share price has been an exceptionally strong performer over the last couple of months.

It was around this time in March that the airline operator’s shares sank to a multi-year low of $2.03.

Since then Qantas’ shares have rebounded remarkably strongly and are fetching $3.58 on Thursday afternoon. This means they are up more than 76% since hitting that March low.

Is it too late to invest?

Whether Qantas’ shares are undervalued, fair value, or overvalued will depend largely on how quickly travel markets recover from the pandemic.

Based on current economic reopening expectations, I would say that the company’s shares are closing in on fair value now.

However, if a vaccine is successfully developed and distributed in the coming month, then travel markets could rebound far quicker than expected. In this scenario, I would say Qantas’ shares are very good value.

For this reason, I’ll be watching the progress of Moderna’s COVID-19 vaccine candidate, mRNA-1273 very closely. The early results have been promising, but there’s still a bit of work and further testing to go before we’ll know whether it is the key to unlocking global borders.

Morgan Stanley retains its overweight rating.

One broker that is bullish on Qantas is Morgan Stanley. This morning it retained its overweight rating on the company’s shares with a slightly reduced price target of $5.20.

This price target implies potential upside of almost 45% over the next 12 months.

According to the note, the broker believes that Qantas’ business will normalise in FY 2023. However, it suspects it could return to profitability a year earlier.

Though, it has warned that there is a lot of uncertainty, not least with rival Virgin Australia Holdings Limited (ASX: VAH) in voluntary administration. It feel that what happens with Virgin Australia could have a major impact in the coming years.

More reading

• Small-cap ASX aviation share soars 30% higher as it re-establishes earnings guidance
• Why investing in these COVID-19 stricken ASX shares won’t be the same again for a very long time
• ASX 200 climbs 1% in positive start to the week
• Virgin narrows its shortlist down to 4 suitors
• 5 ASX 200 winners and 5 losers of the week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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