(FORTUNE Magazine) – Growth companies, those prized greyhounds of the capitalist system, awe investors a lot less than they used to. The premium paid for their stock has shriveled, and therein lies a buying opportunity.

For the past 16 years the Kidder Peabody brokerage firm has kept track of the 50 Big Board stocks with the highest price/earnings multiples. Kidder's elite list screens out companies with high P/Es for quirky reasons, such as the marginal mutt whose multiple of 256 is based on earnings of 2 cents a share. The top 50 are tops because they tear around the track year after year. Investors still pay extra for these companies. But the spread is now only a pittance compared with the early Seventies, when money managers were obsessed with that era's roster of ''Nifty Fifty'' stocks. Back then the median P/E multiple of the highfliers was 3.3 times that of Standard & Poor's 500-stock index. At the end of January the P/E of the top 50, a club whose members come and go with fluctuations in earnings and stock prices, was only 1.4 times the market's. In other words, growth is cheap. What caused the narrowing of the gap? Part of the answer lies in economics. With long-term interest rates creeping up, the discounted present value of future income falls, so investors aren't willing to pay as much for a given rate of earnings growth. ''Rising interest rates usually hurt the top 50,'' says Evelyn Feit, a market strategist at Kidder Peabody. Other factors are at work too. The prevailing style of investing has changed. ''The world has come around to value investing in the last eight years,'' says investment strategist Marshall Acuff of Smith Barney. ''People are looking for stocks whose market valuation does not reflect asset valuation.'' For the most part, bargain hunting means companies with low P/Es. Consider, for example, the orgy of leveraged buyouts and share buybacks that has supplied much of the market's bounce since the crash. Growth companies did not attend the party. The participants, says Edward Mathias of the T. Rowe Price mutual fund company in Baltimore, ''were companies that are the inverse of growth companies -- not much growth and assets you can sell off. No one is taking over Wal-Mart, whose P/E is twice the market's. They're taking over Federated Department Stores.'' Federated's P/E was 30% below the market's before Robert Campeau launched a successful takeover bid last year. Cyclical companies on the rebound are also in vogue. The yearning for a lost way of life is palpable in the voice of George Yeager of the New York investment advisory firm Yeager Wood & Marshall, a growth specialist whose clients' portfolios have underperformed in the past few years. ''These days,'' says Yeager, ''the idea is to spot short-term earnings momentum. Who cares whether Abbott Laboratories and Rubbermaid will be churning out gains of 15% to 20% over the next three years when Bethlehem Steel may grow 100% next quarter?'' Index funds, designed to mirror the market rather than beat it, have siphoned off another chunk of money that used to go into growth stocks. Foreign investors, an increasing presence in the market, prefer big-name companies to high P/Es. Most important of all, 1988 was an unusual year in which the average company boosted earnings faster than the growth gang. As companies reaped a harvest from restructuring and the fallen dollar, per-share earnings of the S&P 500 companies jumped an estimated 36%. ''Even in our growth stock portfolio our companies' earnings were up only about 25%,'' says Mathias. But this year promises to be different. Wall Street's analysts expect earnings growth for the S&P 500 to slow to 7%, according to the Institutional Brokers Estimate System. In that environment, growth companies will again stand out. When you shop for growth, don't buy just any old stock because it has a high P/E. Kidder recommends only 15 of the top 50, and their multiples early this year ranged from 17 to 29, vs. the market's 12. The industries with the most buys on Kidder's list: consumer products and services (Albertson's, Walt Disney, Lands' End, Rubbermaid, Toys ''R'' Us, Wal-Mart); health care (Merck, Schering-Plough, Upjohn); and business services (Dun & Bradstreet, Waste Management, Chemical Waste Management, Browning-Ferris). Choose companies with low risks, loyal customers, and steady sources of revenue. ''There's no way Waste Management is going to lose its tens of thousands of customers, particularly when it's needed more than ever,'' says Yeager about the solid-waste hauler based in suburban Chicago. ''The company has disposal sites that the competition won't have for years. That's where a multiple is worth it.'' Waste Management is trading at a P/E of 20, and earnings per share have been growing 26% a year on average since 1983. One company in the top 50 until early this year, and still on the borderline, has a corner on its market. ''I see Sallie Mae as the closest you can come to guaranteed 20% earnings-per-share growth,'' says Anne Anderson, president of Atlantis Investments, a New Jersey-based growth stock manager. When Congress told banks they would not be reimbursed for student loan defaults unless they first made a vigorous effort to pursue the deadbeats at their own expense, banks unloaded the loans the way colleges kick out underachievers. Sallie Mae, properly known as the Student Loan Marketing Association, bought them. No matter that some of the borrowers were nonpayers; Sallie Mae has a big enough volume to cover the cost of hunting them down, after which it qualifies for collection on the defaulted loans from Uncle Sam. Keep an eye peeled for the sort of high-tech upstart that used to dominate the upper end of the P/E charts. One fast-growing favorite is Acuson, a manufacturer of sophisticated medical machinery. After making its name in ultrasound equipment, the Mountain View, California, company has branched into the radiology market. ''It's a stock I really like,'' says Morgan Stanley analyst Paul Brooke, who estimates earnings growth of 32% this year on the heels of a 55% surge in 1988. Just how cheap, in relative terms, are the highfliers? David Wendell, a consultant for Yeager Wood & Marshall, has dusted off a P/E table devised by the late Benjamin Graham, dean of value investing, calculating the true worth of a company's stock at different interest rates and earnings growth rates. Even though rising interest rates might seem to make fixed-income investments more alluring than stocks, the model shows that today's S&P 500 is fairly valued. But by the same formula, Wal-Mart's stock is 35% cheaper than it should be, Toys ''R'' Us is undervalued by 39%, Rubbermaid by 19%, and Walt Disney by 34%. Other bargains abound. ''Name me a cycle,'' says Yeager, ''whether it's in stocks or bonds or pork bellies, that goes from extreme overvaluation to fair valuation and then stops without overshooting to undervaluation.'' Yeager thought the top 50 were undervalued three years ago. He is fervent in that feeling today.

CHART: NOT AVAILABLE CREDIT: SOURCE: KIDDER PEABODY CAPTION: THE HIGHFLIERS VS. THE MARKET The stock price premium for high-P/E companies is the lowest in years. One highflier, Waste Management, runs this PCB incinerator in Chicago. &