We’re already almost halfway through September 2019, so with reporting season finished it could be a good time to buy shares of ASX mid-caps.
Mid-caps could be the best ones to consider. They’re big enough that the chances of going bust have reduced significantly, particularly if they’re profitable. But mid-caps are small enough that they have good growth potential.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is a New Zealand based donation systems and software business for religious, not-for-profits and education providers in the US, Canada, Australia and New Zealand. Pushpay is used by over 7000 churches worldwide. The average gift is $192.
Since the start of July 2019 the Pushpay share price is 15% lower despite the company reporting total revenue grew 40% to US$98.4 million in FY19 and predicting that FY20 profit will show a solid improvement.
Pushpay could be one to watch as it’s now cashflow positive and new revenue should be very beneficial to free cash flow. But, it will need to be careful with any acquisitions it’s going to make as Matt Joass outlined here.
Gentrack Group Ltd (ASX: GTK)
Gentrack provides billing and other types of software for essential service organisations such as energy businesses, water utilities and airports. It has offices in New Zealand, Australia, the UK, Singapore, USA and Europe.
It provides services for over 220 utility and airport sites in more than 30 countries. One of its main customers is Sydney Airport Holdings Ltd (ASX: SYD).
The ongoing Brexit drama is causing issues for Gentrack with delays and bad debt risks. Brexit could be a big problem, but it’s likely to be resolved one way or another in the next 12 months.
However, management continue to say that there is a strong pipeline of opportunities in its pipeline, which could help grow profit in the coming years.
Which To Buy?
I like that both businesses are technology based businesses and are globally focused. Out of the two I’d probably go for Pushpay, it’s still quite early on in its growth path and can expand into other industries and other geographies.
Other growth shares I’d be interested in buying are the ones in the free report below which could be exciting ones to own.
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