3 ASX stocks to buy now to get rich later

Somnomed Limited (ASX:SOM), Macquarie Telecom Group Ltd. (ASX:MAQ) and Lovisa Holdings Ltd (ASX:LOV) are three companies with good long term prospects.

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Focusing on stocks in the "sweet spot" of $200 million to $500 million market capitalisation allows an investor to screen for companies which can possess a number of appealing attributes.

Here's just a few of those key attributes that you may find in this market space:

  • already proven business model
  • profitable or at least near breakeven
  • operating in an attractive niche
  • a long runway of revenue growth opportunity ahead

With the above criteria in mind, here are three companies that look to have attractive growth profiles.

Somnomed Limited (ASX: SOM) provides diagnostic and treatment solutions for sleep-related breathing disorders including obstructive sleep apnea (OSA) and snoring.

In this regard, SomnoMed is a competitor to the larger ResMed Inc. (CHESS) (ASX: RMD).

There is an important difference however. While ResMed manufactures masks and breathing apparatus which could be described as invasive, SomnoMed has developed a mouthguard-style product which is relatively non-invasive.

A recent trading update by SomnoMed highlights the strong growth rates the company is currently enjoying.

For the first quarter SomnoMed achieved unit sales growth of 16.9% and revenue growth of 13.4% to $10.9 million.

Growth was strong in both North America and Europe with the added positive news that SomnoMed's products will be eligible for reimbursement in France.

Macquarie Telecom Group Ltd. (ASX: MAQ) is one of the few telecommunication companies to have not been caught up in the merger and acquisition activity which has swept through the sector over the past few years.

The group specialises in three core areas:

  1. As a full service provider of telco needs to mid-sized businesses
  2. Cloud services
  3. Cyber security, secure cloud and data centres for the Federal Government

For the 12 months ending June 30, Macquarie Telecom achieved a 5% increase in revenue and a 23% increase in earnings before interest, tax, depreciation and amortisation (EBITDA).

With a suite of strategic data centre assets and contracts, Macquarie appears well placed to benefit from growing demand for telco services.

Lovisa Holdings Ltd (ASX: LOV) is a retailer of 'fast fashion' jewellery.

The company already has 162 stores across Australia and New Zealand with a further 92 stores spread across Singapore, Malaysia, South Africa, UK and the Arabian Gulf.

This growing presence in overseas locations is the basis for investor enthusiasm for the stock, with supporters seeing a large opportunity for further store roll-outs.

Importantly, it's not just the expansion opportunity which is enticing. Same store metrics are also appealing with comparable sales up 5.5% last year.

Lovisa's management has provided guidance for growth in store numbers of between 20 and 30 new stores and a same store sales target of between 3% and 5% in the current financial year.

Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Bruce Jackson.

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