(FORTUNE Magazine) – BOSTON SCIENTIFIC -- Boston Scientific is on the cutting edge of medical cost cutting. The company, in the Boston suburb of Watertown, develops and manufactures catheters and other products that can be used as alternatives to traditional surgery. Says CEO Peter Nicholas: ''We were one of the first companies to articulate the concept of less invasive procedures.'' The concept became possible as medical imaging techniques improved, allowing physicians to see inside the body and manipulate instruments through a natural opening or a tiny incision. As surgeons began to accept the benefits of poking under the skin instead of cutting into it, Boston Scientific was there, not just with products but with a compelling marketing pitch as well. Nicholas, for example, estimates the cost of traditional coronary bypass surgery at $50,000 to $70,000, including the hospital stay and weeks of recovery time needed. By contrast, clearing out a clogged artery with one of Boston Scientific's catheters (which can be inserted under the skin of a patient's arm) takes just a few hours and costs around $12,000. Hambrecht & Quist analyst Kurt Kruger says Boston Scientific's competitive position will strengthen as health care reform takes hold. Says he: ''A lot of its products are expensive relative to a scalpel, but they enable the system to scoot the patient out the door, saving huge hospital bills.'' Kruger expects 1993 net income to increase 41%, to $80 million, on a 35% rise in sales, to $425 million. The stock traded recently at $18, or 23 times his estimate for 1993 earnings per share. An important element in Boston Scientific's growth has been its ability to leverage technology across its four largely autonomous divisions: Medi-Tech (radiology), Mansfield (cardiology), Microvasive Endoscopy (gastroenterology), and Microvasive Urology. For example, a device used by Microvasive Urology to remove obstructions in the urinary tract is currently being evaluated for a coronary application by the Mansfield division. Says CEO Nicholas, whose brother is former Time Warner co-CEO Nick Nicholas: ''We explore a technology in less critical places and then apply it to higher-risk situations. This accelerates development. You know how to introduce the device and how the body reacts.''

ENGRAPH -- Good things come in Engraph packages, and not all of them are small. The company, in Atlanta, designs and manufactures bags for Oreo cookies and foil wraps for Nestle Crunch bars, but its diverse line of products also includes large decals used by beverage companies that redesign their logos and want their vending machines and delivery trucks to match. Niche packaging has been company policy since Leo Benatar joined Engraph as CEO in 1981. ''We said we weren't going to be packagers to America,'' explains Benatar. ''We decided to look at what we did well, and determine where there were growth opportunities and where the markets were very fragmented.'' Engraph, for example, is now the largest maker of candy wrappers in the world, and the only company producing the paperboard caps that hotels like Marriott use to cover glasses in guest bathrooms. Steven Huffines, an analyst at Sterne Agee & Leach, expects 1993 net income to increase 22%, to $12.4 million, on a 14% rise in sales, to $268 million. The stock traded recently at $13.50 or 21 times his 1993 earnings- per-share estimate. Benatar cites two promising areas for future growth: screen printing, a process that makes bottles of, say, Vidal Sassoon shampoo and Clearly Canadian look as if their labels are painted on, and couponing, the process of placing removable coupons onto a package for instant rebate at the cash register.

FRITZ -- Fritz Cos. provides one-stop logistics services for large corporations that export and import. The San Francisco firm owns no ships or planes, but by using its nationwide network of offices and a state-of-the-art information system, it arranges to transport goods from Beijing to Buffalo or Cleveland to Caracas, and handles all the customs paperwork in between. Fritz has targeted mainly FORTUNE 500 clients, including Boeing, Dow, and Sears, which asked Fritz to manage all its overseas logistics two years ago. Kenneth Medford of Sears says working with Fritz enables his company to ''narrow the gap between when we receive merchandise and when we sell it. We have more timely delivery because we have the methods in the system to measure and track the movement of the goods.'' John Larkin, an analyst at Alex. Brown & Sons, forecasts that net income will grow 32% this year, to $13.9 million, on a 9% jump in net revenues, to $155 million. The stock traded recently at $25.75, or 21 times his estimate for 1993 earnings per share.