Where are high-tech investors placing bets?

SAN DIEGO -- The American Electronics Association on Thursday bestowed its version of the "Oscar" to five fast-growing technology firms during the final day of its annual "Classic" financial conference.

KLA-Tencor Inc., a San Jose, Calif.-based semiconductor equipment firm, joined Tellabs Operations Inc., Inter-Tel Inc., Tekelec Inc. and Electronics for Imaging Inc. as the five member companies with the highest per-share increase in the past five years.

"I congratulate these highly successful AEA member firms," said AEA president and CEO William Archey. "They exemplify the dynamism and spirit so typical to our industry. And for more than 25 years, the AEA Classic has been the place for these high-potential AEA member companies to present their stories to the nation's investment community."

In the past five years, the average per-share stock price of five-year participants in the "Classic" conference improved 267.51 percent since 1992. Tellabs Operations in Lisle, Ill., led this year's companies with a per-share increase of 2,573 percent.

"I think that shows that the companies lining the hallways here -- even the smaller, obscure ones -- are the companies of the future," said Jeffrey Hagan, an analyst at UBS Securities. "This is where the some of the great investment stories are born."

Inter-Tel Inc., a Reno, Nev.-based networking and telephony firm, saw its per-share price improve from $4.50 per share to $50.25 per share from 1991 to 1996 -- an increase of 45.75 points, or 1,017 percent.

"It's a great honor and a testament to efforts all our employees have made," said the company's CEO, Steven Mihaylo. "Any time an organization like the AEA recognizes you, it feels good. It shows that our goals and vision are shared with the investment community and, so far, it's paid off."

For the hundreds of financial analysts and investment bankers gathered here in San Diego, the secret to making the trip worthwhile is establishing qualitative contacts with these technology firms.

"This really is our Comdex," said Lawrence Harris, an analyst at Jackson Partners & Associates. "This is our chance to meet face-to-face with the people that are leading these companies. Instead of listening to a conference call or reading a prospectus, we get a change to hear from the CEO or the CTO. There's no filter."

And for the presenting firms, this conference is similar to an audition for a Broadway musical or a role in a motion picture.

"There's a lot of pressure," said Tom Docyz of Integrated Silicon Solutions Inc., a San Jose, Calif., memory chip maker. "You don't get too many opportunities to tell brokers and investors your story. And every time they walk out of the room, you wonder if they understand your story and where you are heading or if they've already written you off. At times, it's agonizing."

But when a company has made that connection, and its stock price has appreciated by 600 or 800 percent in five years, the recognition is sweet.

"It gives you a feeling of validation," Mihaylo said. "Like you've arrived and mean something on Wall Street. And with that comes a lot of prestige and clout."