The Australian share market is home to a large number of mid cap shares. The good thing about this is that mid caps generally carry less risk than small caps, but stronger potential returns than large caps.

This arguably makes it one of the best areas for investors to look for market beating returns over the next decade. But which mid cap shares should you buy?

Three that I would buy with $3,000 are listed below. Here’s why I rate them:

Bubs Australia Ltd (ASX: BUB)

Bubs is an infant formula and baby food company which has been growing at a very strong rate over the last few years. And thanks to some recent supply agreements with Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW), it looks well-placed to continue this trend. While previously it was running loss-making operations, it recently revealed positive quarterly operating cashflows. I’m optimistic this means 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 good long term option for investors.

Opthea Ltd (ASX: OPT)

Opthea is a developer of novel biologic therapies for the treatment of eye diseases. The key attraction to the company for me is the OPT-302 combination therapy. Last year Opthea delivered very strong Phase 2b study results. If its Phase 3 trial proves just as successful, then the future could be very bright for the company. The current standard of care treatments for wet age-related macular degeneration and diabetic macular edema had sales of over US$3.7 billion and US$6.2 billion in 2018. Another positive is that Opthea has a very strong balance sheet and appears well-funded to see OPT-302 through its trials.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a fast-growing donor management platform provider for the faith, not-for-profit, and education sectors. Due to the quality of its product, Pushpay has been growing its share of the U.S. market at a rapid rate in recent years. This has led to the company’s recurring revenues increasing very strongly. The good news is that it still has a long runway for growth. Last week it revealed that it is targeting 50% of the medium to large church market. This represents a US$1 billion opportunity, which is many multiples what it achieved in FY 2020.

More reading

• ASX shares I’d invest $10,000 into today
• How to build good wealth with small investments
• Is it time to buy ASX small caps for your portfolio?
• The Pushpay share price is up 70% in 2020: Why I would still invest
• 3 ASX growth shares to buy immediately with $3,000

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 BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended 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.

The post 3 quality mid cap ASX shares to buy with $3,000 appeared first on Motley Fool Australia.

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The spread of coronavirus is reshaping our economic future and paving the way for new winners among ASX shares. Structural shifts have been accelerated with remote working, digital payments, and e-commerce benefitting from more widespread adoption. 

ASX shares have faced very different fates since borders closed in March. The banking sector has taken a hit with profits and dividends plummeting. The travel sector remains in limbo. The retail sector has suffered from store closures and declining sales. But some individual ASX shares are not just surviving, but thriving in this new COVID-19 world. 

Online shopping has surged as consumers in lockdown go to the web for everything from essentials to luxury goods. Companies leveraged to this trend are benefitting. Kogan.com Ltd (ASX: KGN) and Afterpay Ltd (ASX: APT) are 2 ASX shares that are emerging as potential winners in the post-COVID world. 

Kogan sales and customers surge 

Kogan added 139,000 active customers in April, bringing its total number of active customers to 1,948,000. Gross sales in April 2020 grew by more than 100% compared to April 2019, leading to growth in gross profit of 150%. Kogan is Australia’s only diversified online retailer, and customers have inundated it as an alternative to physical shopping. 

The Kogan business model relies on offering products at lower prices than competitors, aggressively building market share while operating on slim profit margins. As an online-only retailer, Kogan benefits from lower costs than competitors with a physical presence, saving on store rental and staffing costs. 

Kogan launched Kogan Marketplace last year which allows third parties to sell via its website. The venture has been performing well, with sales growing 7% quarter-on-quarter between December and March. March 2020 sales were up 69% on February 2020 sales. The venture reduces working capital demands which should allow for greater profitability in future. 

Afterpay benefits from shift to online 

Buy now, pay later provider Afterpay has also benefited from the surge in online shopping with March being its third-largest underlying sales month on record. Underlying sales in the March quarter increased 97% compared to Q3 FY19. For the year to date, Afterpay has reported underlying sales of $7.3 billion, growing at 105% compared to the prior corresponding period (pcp). 

Healthy growth in merchant and customer numbers was recorded during the March quarter – active customers grew to 8.4 million, up 122% on the pcp. Merchant numbers grew to 48,400 globally, up 78% on the pcp. 

Foolish takeaway

The future of shopping and payments is changing rapidly thanks to coronavirus. Kogan and Afterpay are at the forefront of this shift. 

More reading

• 3 common mistakes millennials make investing in ASX shares
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
• 2 exciting ASX tech shares to buy right now
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of AFTERPAY T 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.

The post These ASX shares are set to dominate the post-COVID-19 economy appeared first on Motley Fool Australia.

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