Dell desk top computer

They've done a lot for you lately, but what about the next millennium?

The Nineties have been one of the best decades of the century for stocks, and nobody did better than Dell Computer's stockholders. Had you been among the fortunate who owned Dell shares when the decade began (and you steadfastly held on to them), you'd be sitting on a return of 57,282%--that's right, 57,282%--the result of compounding when a stock more than doubles year after year after year ...

You know Kiplinger's First Law of Investing--that past results are no predictor of future performance. But there's also Newton's First Law of Motion--that an object will keep moving on the same path until deflected by an outside force. So, with the assistance of fund manager James O'Shaughnessy, we unearthed the highest-returning stocks of the 1990s and then asked analysts who follow the stocks' fortunes what they think about their prospects for the next three to five years.

For the moment, these companies' futures look reasonably bright. On average, analysts expect each of them to rack up earnings gains of at least 22% a year over the next five years. A word of caution, though: With the run-up that these stocks have had, expect inordinately high price-earnings ratios in some cases. Earnings estimates are courtesy of Zacks Investment Research.

AMERICAN POWER CONVERSION

Total return: 5,143%

Recent price: $44

Computers need just the right amount of juice, and American Power (APCC, Nasdaq) makes equipment that keeps PCs and mainframes protected during power outages and voltage spikes. "APC is an attractive way to participate in the growth of the Internet without relying on the success of any specific technology," says Tucker Anthony analyst William Becklean. Analysts expect annual earnings growth of 22% through 2003.

NBTY

Total return: 5,300%

Recent price: $8

A maker of vitamins and nutritional supplements, NBTY sells products through mail order, as well as drugstore and supermarket chains. Increased public interest in health and fitness has helped drive NBTY (NBTY, Nasdaq) to a 57% annualized return over the '90s. Analysts are pulling back on earnings estimates, however, and the stock has fallen nearly 68% from its early-April high.

CLEAR CHANNEL COMMUNICATIONS

Total return: 7,578%

Recent price: $48

A radio and billboard-advertising behemoth, Clear Channel recently announced the purchase of rival Jacor. That will make Clear Channel (CCU, NYSE) the third-largest radio-station company in the U.S., with an estimated $1.1 billion in 1998 revenues. Earnings are expected to grow at a 29% annualized pace.

REPUBLIC INDUSTRIES

Total return: 8,599%

Recent price: $18

The road to riches for Republic (RII, NYSE) leads through its Alamo and National car-rental agencies and franchised car dealerships, which account for 85% of its estimated $19 billion in sales in 1998. But Republic has been challenged by the stormy economy, and analysts are reducing estimates. Long-term earnings-growth projections are still about 28%, though.

AMERICA ONLINE

Total return: 11,616%

Recent price: $140

The company, which went public in 1992, recently announced a stock split and handily beat analysts' earnings estimates. Now that the price of a personal computer with Internet access has dropped to about $700, America Online (AOL, NYSE) is adding millions of subscribers a year, and the 47% annual rate of earnings growth that analysts forecast may be justifiable. The question is whether its price is, too, at 126 times estimated earnings for the fiscal year ending next June.

JACK HENRY & ASSOCIATES

Total return: 15,893%

Recent price: $48

Relatively unheralded Jack Henry (JKHY, Nasdaq) provides data-processing equipment to about one-third of the nation's 9,100 community banks, and it has achieved a 79% annualized return since 1990. "They were one of the first bank-service companies to be Y2K-compliant," says Prudential Securities analyst Kevin Dyches, "but growth will soon slow down." Dyches predicts a 30% rate of earnings growth in coming years, but the consensus of Dyches and the other two analysts who follow the stock is 28%.

LABOR READY

Total return: 17,669%

Recent price: $24

This staffing company out of Tacoma provides unskilled labor for construction and factory work, a decidedly nontechnological field. Yet revenues for Labor Ready (LRW, NYSE) over the first nine months of 1998 grew 86%, and "the trend toward outsourcing continues to be very powerful," says Everen Securities analyst Jerry Herman. As with Jack Henry, few on Wall Street follow this scorching stock. The consensus of the two analysts who do is for profits to rise at a 49% clip. Its initial public offering was in 1993.

CISCO SYSTEMS

Total return: 19,042%

Recent price: $67

A juggernaut that should continue upward on an Internet-equipment-fueled hot streak, Cisco (CSCO, Nasdaq) has produced an annualized 84% return since going public in 1990. The company produces about four-fifths of all Internet routers, and companies such as America Online and Sprint are using them for their Internet-backbone upgrades in the near future. Earnings should grow at a 28% annual pace.

EMC CORP.

Total return: 21,085%

Recent price: $69

This maker of data-storage devices turned an investment of $1,000 at the beginning of the decade into more than $200,000. EMC (EMC, NYSE) should see more explosive growth, thanks to burgeoning computer networks and e-commerce transactions. Earnings for 1999 are estimated to grow 30%, slightly more than the long-term prediction of 27%.

DELL COMPUTER

Total return: 57,282%

Recent price: $66

Now master of the mail-order-computer universe, Dell (DELL, Nasdaq) is the "poster child of the '90s bull market," says O'Shaughnessy, who manages O'Shaughnessy Cornerstone Growth fund. Had you invested in Dell at the start of 1990, you'd have reaped an annualized return of 107%--doubling your stake, and then some, every year. Dell is poised for further glory if notebook- and desk-top-PC sales continue to increase. A consensus of analysts predicts 30% annual earnings growth over the next five years.

REPORTER: JAMES RAMAGE