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Could these 3 small caps be future ASX giants?

Picking small cap stocks that end up being the massive companies of tomorrow will always be a difficult job. Long-term shareholders of giants like Woolworths Limited (ASX: WOW), CSL Limited (ASX: CSL), and Ramsay Health Care Limited (ASX: RHC) invested while these companies were still small and have reaped returns of between 500% and 3,500% over the last 15 years.

Picking the companies that deliver those kinds of returns over the coming 15 years will be difficult, but to give yourself the best chance, consider the big trends.

The Global Workforce

I believe that the growing opportunities available in developing countries will see Western workers moving away from their home countries in search of new and exciting job prospects. This should increase the demand for money transfers between currencies, which could fall right into the arms of low-cost provider Ozforex Group Ltd (ASX: OFX). The company has a market cap of $560 million and is estimated to have only a 1% share of its global market. Providing a low-cost solution to consumers is proving profitable already.

More Old People

It’s a fact, Australians are getting older. Australia’s demographic mix is expected to continue getting older over the next 10 to 15 years, which should sustain demand for medical services. The government is pushing for more diagnostic services, aiming to identify a weakness before it becomes an illness. This will benefit companies like Capitol Health Ltd (ASX: CAJ), which has 50 diagnostic imaging clinics in Victoria. The company is looking to expand its offering of MRI, CT scan, X-ray and ultrasound services to other states soon.

Rich Chinese Consumers and Gluten Intolerance

The average Chinese consumer is getting wealthier, and I know more and more people who are going for gluten-free diets. The increasing demand for premium dairy and meat products in China, and allergen free goods in developed countries is being addressed by Australia’s own Freedom Foods Group Ltd (ASX: FNP). The group is a specialist producer of gluten and dairy free cereals and snacks to Australia and the US, as well as the producer of long life milks to the Chinese market. Long-term prospects are good for such a well-positioned company.

Another small cap, that we believe really has the potential to match it with the bigger companies is a small but ultra promising ASX company that the Motley Fool staff have hand-picked for you. You can get the name just by clicking here!

"The Motley Fool's Top Stock for 2014."

Motley Fool contributor Andrew Mudie owns shares in OzForex and Freedom Food. The Motley Fool owns shares in OzForex. You can find Andrew on Twitter @andrewmudie

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