(FORTUNE Magazine) – One trick to turning up tech-stock bargains is to step back from the hot battlefields like the Internet and look at companies that supply others with "plumbing." For example, Glenayre Technologies makes switches and other components for pagers and is poised to succeed even if an orange juice company suddenly diversifies to challenge Motorola as a leading manufacturer of pagers.

Investors also need to look beyond a company's P/E and potential earnings growth and factor in how a company's market share may grow within an industry, says John Force, manager of PBHG Technology & Communications fund. Strategic partnerships and proprietary technology are important too, as is the degree to which a company is protected from potential competitors.

The table shows companies in different segments of the technology industry that meet most of these requirements. Cheyenne Software, of Roslyn Heights on New York's Long Island, trades at 20 times estimated 1996 earnings, not far shy of its industry average of 26. Yet it owns more than 70% of a market that Curt McLeod, senior vice president at Piper Capital Management, thinks will grow at a 40% to 50% rate over the next two years.

A recent selloff in the semiconductor industry, meanwhile, leaves investors strong contenders to pick from. Among them: Altera, a San Jose maker of programmable logic chips. Altera's stock trades at P/Es some three points above the industry average of 12.6. But Erik Jansen, a semiconductor industry analyst at Alex. Brown, estimates that 1996 earnings will rise 50% and make that P/E almost insignificant. Says he: "Just about anywhere you look in wireless or high-speed equipment, you'll find a piece of equipment highly dependent on these products."

You can also find reasonably priced tech stocks in one unlikely setting--the red-hot arena for tech IPOs. Such IPOs, according to Securities Data Co., represented 38% of 1995's new issues and 29%, or $7.9 billion, of all offerings, up from 28% and 17%, respectively, the previous year. Sure, there's plenty of flimsy merchandise in the IPO market lately, but there's value too. The trick is to tell the difference.

Unfortunately for investors, tech IPOs can't ride on brand names as in other industries. Investors who ate well at Boston Chicken's restaurants would have been wise to put their money where their mouth was. But a scrumptious semiconductor is harder to spot. Did you spy Spyglass when it went public in June? Since then, the software maker's share price has risen 406%. Here are some tips to help you get in on future trailblazing IPOs and steer clear of the shooting stars.

Look for a category creator or niche marketer. Shareholders do well off both. Witness Verity, which has carved a niche by making software that searches databases. It has produced a 263% stock run-up since going public in October. This specialty is taking off and its applications are limitless, says Abhishek Gami, an analyst at Duff & Phelps.

Avoid one-product wonders. General Magic saw its shares rise from $14 to $32. Investors hoped its software would become the standard for things like using laptops as fax machines. But other manufacturers decided to go at it alone, leaving General Magic in the cold. The stock is now under $12.

Do Financial Analysis 101: Check the prospectus for historical revenue and unit growth. This may mean avoiding companies that haven't been around long. "You may miss new exciting areas, but you're not going to catch many of the bombs, either," says Force. Visit a library to learn more about the industry so that you can get an idea of how the company that's caught your eye may fare.

And if you have other unanswered questions--like what the company really makes--pick up the phone. The price of a call is a tiny expense compared with what you may win or lose.

--Henry Goldblatt