3 bargain growth stocks to buy today

3 of the ASX's best growth stocks to buy today.

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Here are three top-performing stocks trading at reasonable prices today.

Vitamin company Blackmores Limited (ASX: BKL) has a terrific brand, generates high returns on equity (ROE) and has a stellar track record. In 2016, return on equity ROE was an astounding 56.1% and earnings-per-share (EPS) have grown 3.5 times to 580.6 cents last year.

2017 looks like it will be softer after the company reported 8.1% lower sales for the first quarter and a 48.6% fall in net profit. The exaggerated profit fall highlights the operating leverage in the business.

Reassuringly, management have guided for improved results in the second quarter and explained that the major cause of the weak performance was Chinese consumers and changing distribution channels. Importantly, there is no suggestion that underlying demand from China is faltering and in contrast there are plenty of reasons to think that Chinese sales will continue growing for many years. Therefore, recent falls in Blackmores' share price could be viewed as a buying opportunity for the patient investor.

Online real estate advertiser REA Group Limited (ASX: REA) is another former market darling that has come under pressure recently. Just like Blackmores, REA generates monstrous ROE which was 41.5% in 2016 and has grown EPS by 2.5 times since 2012.

Whilst recent reports of falling listing volumes may indicate the Australian market has reached maturity, REA still announced an impressive set of numbers for the first quarter of 2017. Due to the company's dominant position it could increase prices despite reduced listings and therefore improve revenue and profits in its core business. And although investors might have to accept lower growth n the Australian business over future periods, the company is developing an international business that could drive further EPS gains.

Shares in TPG Telecom Ltd (ASX:TPM) were smashed when the company issued disappointing guidance alongside its 2016 result. However, the 40% fall in share price seems a little overdone considering the company is still forecasting an improvement to profit next year, albeit a moderate one.

Whilst the company was richly priced prior to its results release, another reason for the fall could be fears surrounding the enforced switchover of home internet users to the NBN. This potentially opens the market to more competition and threatens profit margins. However, as one of the largest telco providers in Australia, TPG has significant scale advantages in terms of extensive marketing resources and its large existing customer base.

Just like Blackmores and REA, TPG has a great track record with EPS up 3 times since 2012, although it generates a lower ROE than the above two companies due to the high capital cost of building network infrastructure. Based on 2017 profit guidance it is probably trading on the lowest price-to-earnings ratio (PER) of the three companies.

Motley Fool contributor Matt Brazier 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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