I think the mid cap side of the market is a great place to look for long term investment options.

But which mid caps should you buy? Three which I think would be top options are listed below. Here’s why I like them:

Bravura Solutions Ltd (ASX: BVS)

The first mid cap ASX share to consider is Bravura Solutions. It provides software and services to the wealth management and funds administration industries. It has a number of quality products in its portfolio which are being used by some of biggest financial institutions in the world. This includes the Sonata wealth management platform, Rufus transfer agency solution, the Garradin back office solution, and the recently acquired Midwinter financial planning software.

Collins Foods Ltd (ASX: CKF)

A second ASX mid cap share to look at is Collins Foods. Not only is it one of the region’s largest KFC restaurant operators, it also has a growing presence in Europe. The good thing about the latter is that the KFC brand has a long runway for growth in the European market due to its under penetration. I believe this gives Collins Foods the opportunity to expand its international network materially over the next decade and drive solid earnings growth.

Pushpay Holdings Ltd (ASX: PPH)

A final mid cap share to consider buying with a long term view is Pushpay. It provides a donor management system, including donor tools, finance tools, and a custom community app, to the faith sector. The company has been growing at a very strong rate over the last few years and expects more of the same in FY 2021. In fact, today Pushpay upgraded its guidance just six weeks after first giving it. It expects EBITDA of US$50 million to US$54 million this year, up from its previous guidance of US$48 million to US$53 million. This will be more double FY 2020’s earnings.

More reading

• Pushpay share price jumps nearly 10% on updated guidance
• Start your investment journey with a $2,500 investment in these ASX shares
• 2 fast-growing ASX tech shares to buy right now
• Here are 2 top ASX tech shares for your portfolio
• UBS picks the best ASX retail stocks for the post COVID-19 world

James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Bravura Solutions Ltd and 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 post 3 stellar ASX mid cap growth shares to buy right now appeared first on Motley Fool Australia.

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This is the time when many will be mulling over the question of whether the dogs of FY20 on the S&P/ASX 200 Index (Index:^AXJO) will outperform in the new financial year.

This strategy is popularised by the “Dogs of Dow” theory, which states that last year’s underachievers on the Dow Jones Industrial Average will rebound the following year as businesses move in cycles.

The theory doesn’t quite translate into practice for ASX 200 as there are differences between the Dow and our top 200 benchmark. The most obvious one being the size of companies included in each of the indices.

Value back in vogue

But this doesn’t mean it’s unhelpful to look at FY20 underperformers this year. In fact, this year is probably the best time to be hunting for buys among the laggards compared to past years.

This is because value stocks may finally be pulling ahead of growth stocks for reasons highlighted in my previous article.

This financial year’s underperformers are firmly in the value camp as value stocks trade at a discount to the market and their historical measurements.

On the flipside, growth stocks are those that trade at a premium as investors are happy to bid up shares with better growth prospects in the post COVID-19 world.

Not easy finding the real ASX bargains

But blindly picking ASX stocks from the bargain bin is a recipe for disaster.  Some stragglers deserve to be cast aside as their recovery prospects in FY21 don’t look much better than FY20.

What might work as a better filter is to pick the worst performers that are currently rated a “buy” by most brokers covering the stock.

Using consensus data from Thomson Reuters, there are five ASX dogs that stand out.

Dirt cheap

The worst performer of the group is the South32 Ltd (ASX: S32) share price, which lost around 35% of its value of the past year.

But the majority of brokers think the stock is fundamentally cheap, as do I. I sold out of the base metal miner in August last year but bought back in April when the stock fell under $2 a share.

I think it will head back towards $3 in FY21 as the market thinks the prices for its key commodities are significantly lower than spot prices.

If prices hold around current levels, I suspect we will see a re-rating in the stock.

Zero to hero

Another dog that could find love in the new financial year is the Nine Entertainment Co Holdings Ltd (ASX: NEC) share price.

The media group has long been under pressure due to structural changes in the industry but the coronavirus disruption certainly didn’t help.

The stock slumped around 24% over the past 12 months, but the headwinds are starting to ease.

Outlook improving

The reopening of our economy is one obvious plus point, but that isn’t the only light at the end of its tunnel.

The government’s move to force tech giants like Alphabet Inc (aka Google) and Facebook, Inc. to pay local media outlets to reuse content could be a game changer.

Nine also stands to benefit from further easing on cross-media ownership laws and subscriptions for some of its mastheads, like the Australia Financial Review, are stabilising, if not growing.

The other three wooden spooners with a “buy” consensus rating are registry services company Link Administration Holdings Ltd (ASX: LNK), property group Centuria Office REIT (ASX: COF) and health insurer NIB Holdings Limited (ASX: NHF).

More reading

• How the ASX 200 can help first home buyers save for a deposit
• Millennials be warned! Signs of dangerous ASX share trading grow
• Top brokers name 3 ASX 200 shares to sell today
• Australian unemployment jumps to 7.1%
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors.

Brendon Lau owns shares of South32 Ltd. Follow me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (C shares) and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Alphabet (C shares), Facebook, Link Administration Holdings Ltd, NIB Holdings Limited, and Nine Entertainment Co. 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.

The post Can these 5 FY20 dogs of ASX 200 bounce back in the new financial year? appeared first on Motley Fool Australia.

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Interest rates at record lows are fantastic for borrowers and not-so-good for first home buyers saving for a home.

Where can you turn to save for a home deposit?

According to Fidelity, a $10,000 investment in Australian shares over the past 10 years to 31 December 2019 has returned 11.2% pa which resulted in dollar value of $26,881. This crushes the savings rates offered by the banks.

With a long-term viewpoint to acquire a home, you could achieve a return well in excess of current interest rates on savings accounts and term deposits offered by the big banks by investing in Australian shares.

While investing in shares carries risk in the short term, you could achieve market returns of the S&P/ASX200 Index (ASX: XJO) by investing in an exchange-traded fund (ETF) such as the BetaShares Australia 200 ETF (ASX: A200).

I see 2 big benefits of investing in an ETF that tracks the performance of the ASX 200:

1. Low management cost (0.07% pa for BetaShares Australia 200 ETF)
2. Diversification to reduce company-specific risk

Benefit 1: low management costs

Paying high management costs significantly impacts on the long-term return investors receive on their investments.

The more you pay in management fees, the more you could lose out on meeting market performance.

The real impact of fees over the long term can mean losing out on thousands of dollars!

Benefit 2: diversification

The point of diversification is to eliminate risk that can result from putting all your eggs in one basket. An ETF tracking the ASX 200 like BetaShares Australia 200 can provide protection to an investor portfolio. 

The top 10 ASX shares in the BetaShares fund are:

1. CSL Ltd (ASX: CSL)
2. Commonwealth Bank of Australia (ASX:CBA)
3. BHP Group Ltd (ASX: BHP)
4. Westpac Banking Corp (ASX: WBC)
5. Australia & New Zealand Banking GrpLtd (ASX: ANZ)
6. National Australia Bank Ltd (ASX: NAB)
7. Wesfarmers Ltd (ASX: WES)
8. Woolworths Group Ltd (ASX: WOW)
9. Transurban Group (ASX: TCL)
10. Macquarie Group Ltd (ASX: MQG)

The top 10 is composed of companies in the healthcare, banking, mining, retail, and industrial sectors.

Foolish takeaway

Investing in an ETF may be an excellent way for investors to gain exposure to the share market. As company-specific risk is reduced, you can receive a return similar to the ASX 200. This return can help want-to-be first homeowners save for a home.

In my view, investing in the share market can help first home buyers who are saving for a deposit with a medium to long term horizon. In the short term, it can be very volatile and result in losing a substantial amount of capital.

More reading

• Can these 5 FY20 dogs of ASX 200 bounce back in the new financial year?
• Millennials be warned! Signs of dangerous ASX share trading grow
• Top brokers name 3 ASX 200 shares to sell today
• Australian unemployment jumps to 7.1%
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher

Matthew Donald owns shares of National Australia Bank Limited and Wesfarmers Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Transurban Group, Wesfarmers Limited, and Woolworths 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 post How the ASX 200 can help first home buyers save for a deposit appeared first on Motley Fool Australia.

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