With much of the attention focused on the big banks, Telstra Corporation Ltd (ASX: TLS) and our mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), these are 2 mid cap ASX shares that might be underappreciated by the market.

Challenger Limited (ASX: CGF)

Challenger is Australia’s largest provider of annuities which are financial products that give the investor a reliable future income stream in return for an upfront lump sum payment.

The Challenger share price has come under attack over the past 12 months as the company revised down their return on equity (ROE) target going forward and subsequently, profit targets.

Notably, there was a substantial difference between the company’s statutory profit and normalised profit in the Challenger’s 2019 half-year report.

Challenger are entrenched as the number 1 provider of annuities in Australia with an overwhelming majority of financial advisers preferring Challenger for annuity products over all other competitors.

The use of annuities has been growing strongly ever since the great crash of 2008 and with the Federal Government likely to continue to encourage their use, I think Challenger are set to remain a key beneficiary.

Challenger also benefit from the ongoing mass retirement of the baby boomers whom are the typical buyers of their financial products.

I think Challenger has many years of growth ahead of it and the current price represents a good long term buying opportunity.

Reliance Worldwide Corporation Ltd (ASX: RWC)

Reliance Worldwide designs and manufactures products and parts for the plumbing industry. The company is best known for its push-to-connect (PTC) products which offer plumbers a quicker and more convenient way to install and repair plumbing fittings.

The Reliance share price has taken a big hit this year and is down almost 50% over the past 12 months. A significant proportion of this slide came after company management gave a trading update in May where they revised their forecasts downwards for full year profit.

It seems investors have got jittery, with the share price falling more than 10% in the past 2 weeks alone despite no significant news coming out of the company.

Fellow plumbing business Reece Ltd (ASX: REH) has also had a tough time of late, with its shares trading down more than 20% on this time last year.

Reliance is a well-managed company that still has a long runway for growth with its PTC products and the recent share price negativity may present an opportunity for savvy investors to pick up a quality company for a bargain price.

Reliance are due to release their full year results to the ASX on Tuesday August 27 and I, for one, will be watching with great interest.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Luke has a financial interest in Challenger Limited.