(FORTUNE Magazine) – Everyone has a dream they'd like the stock market to fulfill--a vacation home, a child's education, a peaceful retirement. Yet identifying the companies that can provide such long-term riches is a neat trick. In hindsight, for example, the Intels and Microsofts of the world make investing in technology seem wise, but on the eve of the personal-computer era investors weren't necessarily falling over each other for a piece of the pie. Today a handful of growing industries--women's health care, high-speed communications, assisted living, and drug discovery--may be poised for similar greatness.

These future-focused industries offer a chance for investors to get in on the ground floor (or close to it) of companies that, like Microsoft, may become household names. "Wealth is increasingly created by intellectual capital, not bricks and mortar," says money manager Phillip Lamoreaux of Lamoreaux Partners. Some of these stocks have already seen their prices skyrocket, but despite the big pricetags, believers say the forces driving growth are so compelling that the shares will continue to rise.

A note of caution: Some of these stocks are far from cheap, and others won't soar until the market catches on. Either way, extraordinary opportunity awaits. And while breakthrough technologies involve risk, in these cases the rewards should be worth it.

WOMEN'S HEALTH

"Medical products is a high-growth, $120 billion business, and women's health is one of the fastest-growing areas," says analyst Kurt Kruger of Montgomery. Women--who account for more than half the population--face the threat of diseases like breast cancer (the lifetime risk is one in eight) and osteoporosis (one in three over age 65). And yet only recently has this huge market gotten much needed additional attention from the medical community--and from investors.

High growth doesn't mean only small, undiscovered companies--pharmaceuticals powerhouses are also in on the action. Analyst David Saks at Gruntal says the big plays will be in the stocks of Merck and American Home Products. He predicts that Merck's osteoporosis drug Fosamax could hit $1 billion in annual sales by 2000. About American Home Products, he says, "Nobody is bigger in women's health--and they will move aggressively to protect their position."

In other areas--breast cancer, infertility, cervical cancer, menstrual products--a cluster of new companies is stirring up a lot of activity. Breast cancer research and treatment is one of the most active areas. Fed by a growing emphasis on testing and an increasing population of women over 40, over 1.5 million breast cancer biopsies will be done in the U.S. alone by 2000, says analyst Thomas Gunderson at Piper Jaffray. Since between 80% and 90% of suspicious lumps prove noncancerous, surgery, by far the most common method of diagnosis, is unnecessarily unpleasant and expensive. Now Biopsys, a medical-device company in Irvine, California, has developed a revolutionary biopsy procedure called mammotomy. It is the least invasive, can be done under local anesthetic, and doesn't cause disfiguration. According to Gunderson, Biopsys's innovation could improve diagnostic accuracy in early-stage cancer cases by as much as 60% over other minimally invasive methods, while reducing annual costs (from surgery) to the health care system by as much as $1 billion. In 1996, its first full year of sales, analysts expect $3.4 million in revenues; that could more than quadruple to $15.8 million in 1997. The stock has appreciated 22% since its June IPO, and anticipated profitability in 1997 should give it a strong tail wind.

Infertility is another huge health issue. An estimated 16 million couples in the developed world are clinically infertile, and as more women delay childbearing, the incidence is increasing. In about 40% of cases, infertility is caused by fallopian tube disorders. But Conceptus, a San Carlos, California, startup, is changing the way infertility is handled. The company's first product, a catheter that can access the tiny, fragile fallopian tubes, was approved by the FDA in 1995. A new system that allows visual examination of the tubes is expected to be approved in 1997. This invention could improve pregnancy rates by 125% while reducing costs relative to conventional therapies by 85%, says Samuel Navarro of UBS Securities. Another product in the works is a nonsurgical sterilization tool for which Conceptus hopes to win approval by 1998. "The market outside the U.S. for sterilization is the biggest I've ever seen for a medical device," says Gunderson. After climbing 63% to $22.75 following its IPO last year, the stock has slid back to $10, reflecting an anticipated lack of profits until 1998. There's obviously higher risk in a stock that has no earnings, but profits are expected to grow dramatically--to $20 million by 2000.

Cervical cancer, the most common female cancer, can be cured if detected early--usually via a Pap smear. In the U.S. alone, about 60 million Pap smears are performed each year. But analyst Kruger says that because the smears are hard to read, the tests miss 20% to 30% of abnormalities. Finally, a half century after the invention of the test, the FDA says there's a "significantly more effective" option: Cytyc's ThinPrep, a clearer, easier-to-read test. HMO powerhouse United Healthcare now recommends Cytyc's test for all its female members. Since early November, Cytyc's stock has climbed from $12 to $26.

In October, Cytyc announced an alliance with Digene--a new company that makes the only test for the HPV virus, the main cause of cervical cancer; when taken together, the two companies' tests approach 100% diagnostic accuracy. Since the announcement, Digene's stock has appreciated 32%. Developments that could propel the stock further, like an endorsement from Kaiser Permanente, may come soon.

Menstrual products is another enormous women's health care market: Worldwide, it is a $9-billion-a-year business. And nearly 50% of women voice dissatisfaction with current products, including tampons, which were invented more than 60 years ago. Now Ultrafem has produced a tampon alternative called Instead, a disposable soft cup that fits inside a woman's body and collects fluid. Instead can be worn for up to 12 hours with no fear of toxic shock syndrome, and allows for intercourse during menstruation. Company tests indicate that 80% of women who tried Instead liked it enough to use it again. Ultrafem's stock has been volatile, climbing 260% from its February IPO price of $10 before falling back to $17, driven down in part by shortsellers who thought the product wouldn't gain distribution. To date, that has not been true: The national rollout of Instead began this fall in the Pacific Northwest, with all major retailers carrying the product and with sales ahead of expectations.

Other up-and-comers to keep an eye on include Gynecare, whose stock jumped 40% upon the news that the FDA had approved its procedure to treat uterine fibroids, and Lunar and Hologic, competing makers of systems that help doctors measure the location and severity of osteoporosis.

HIGH-SPEED COMMUNICATIONS

The communications revolution, marked by the explosive growth of the Internet and an insatiable desire for instant information on the part of both consumers and corporations, demands networks with more carrying capacity--more bandwidth, in tech-speak. According to Edward Kozel, chief technology officer at powerhouse Cisco Systems, the per capita consumption of bandwidth in the U.S. is doubling every year. To avert disasters like a busy "911," analysts anticipate an escalation in annual spending on telecom network equipment from $16 billion today to $32 billion by the turn of the century. The beneficiaries? Equipment suppliers. "Back in the gold rush days, the pick sellers got the richest," says John Rohal, research director at Robertson Stephens.

Highflying favorites include PairGain, Tellabs, ADC Telecommunications, and Uniphase. Big-name Internet component companies too--like Ascend, Cascade, and Cisco--have a huge market opportunity in helping telcos beef up their infrastructure and offer Net access. But investing in this arena is not like shopping at Wal-Mart: All these stocks are up, from over 70% to almost 200%, in 1996 alone, and top names sport premium prices, some in excess of ten times sales. Yet while many people have balked at such multiples, the stocks have gone ever higher as the companies continue to deliver superb results. Money manager Lamoreaux calls the telecom expansion "a powerful force that will last well into the next century."

There are cheaper options. Rather than join the feeding frenzy on telecoms celebrity stocks, try bottom-fishing for the unloved and the misunderstood. Analyst Greg Mesniaeff at Robinson-Humphrey calls Telco Systems "a great turnaround story" due to a recent reorganization of management and a strong high-speed data-access product. Chandan Sarkar of Soundview Financial says ECI Telecom, an Israeli company selling products overseas that are similar to PairGain's, is a steal at half PairGain's cost. Another bargain is MRV Communications, a recent market darling that saw its share price slip by more than 60% since September, mostly due to higher-than-expected receivables in the third quarter. According to CEO Noam Lotan, the big number was the result of heavy international and late-quarter sales. He expects them to drop by year-end.

Companies in this sector are making history not just for the wealth they've created with their stocks but for their technological achievements as well. "The Nineties will be remembered as the decade when everything got connected," says money manager Roger McNamee of Integral Capital Partners. Remember, too, that this fast-moving area will see a steady stream of IPOs, so stay tuned.

ASSISTED LIVING

The elderly cohort is the fastest-growing part of the population, and as America grays, the need for better care will continue to build. Life expectancy for those who have reached 85 increased 24% from 1960 to 1990 and is projected to increase another 44% by 2040. Meanwhile, almost 60% of those 85 and older need help with the activities of daily living, and about half are single. These demographics make assisted-living facilities a real field of dreams: Senior citizens no longer able to live at home but not in need of 24-hour medical care can benefit from the perks such facilities offer. Staff members aid those who need help dressing, for instance, while amenities like guest speakers, exercise classes, and 24-hour security provide social interaction and peace of mind. Not only is assisted living far more palatable than life in a nursing home--the facilities are residential rather than institutional--but it's also cheaper, crucial in the era of managed care. "If you build them, they will come," says analyst Robert Mains at Advest.

Surveys estimate that at least 25% of nursing home residents could be cared for in an assisted-living environment at 70% of the cost or less. Mark Banta, a Salomon analyst, predicts that annual revenues in the assisted-living industry will double to almost $30 billion by 2000. Because the biggest 30 companies operate just 2% of the approximately 40,000 facilities, there's growth in buying other properties as well as building new facilities. And unlike other sectors of health care, assisted living is largely free from political risk: About 90% of residents pay their own way.

Few of the assisted-living companies are making money today, and Wall Street has yet to fall in love. Most of the stocks sell near or even below their IPO prices. Analyst Peter Sidoti at NatWest Securities says that the heavy startup costs associated with building new facilities have prompted Wall Street to unfairly penalize the stocks. "It's absolutely idiotic--these companies are building long-term value," he says. The successful players are projected to have big earnings gains beginning in 1998. Analysts' favorite stocks include Alternative Living Services, which has special facilities for residents suffering from Alzheimer's, and Assisted Living Concepts, a low-cost provider that's expected to turn a profit in the last quarter of 1996. Sidoti also likes Sunrise Assisted Living, which builds upscale residences in affluent suburban communities that cater to the "Volvo crowd." Banta of Salomon likes Kapson Senior Quarters, in part because New York, one of Kapson's primary markets, has the second-highest population of residents over 85 (behind California). For investors who like to hedge their bets, there's hotel company Marriott, whose Senior Living Services is the nation's fourth-largest assisted-living operator. "The demographics easily point to ten to 20 years of growth in this industry," says Mark Westman, portfolio manager at Firstar Investment Research and Management.

DRUG DISCOVERY

Genomics, the unscrambling of the human genetic code, is both a medical revolution and a potential moneymaker. The combined forces of biology, technology, and economics fuel what Rachel Leheny of Hambrecht & Quist calls "the new drug-discovery machine." Advances in science are producing a flood of information about genes; computer software is capturing it in usable form. The collaboration between top biotech minds and Silicon Valley's best and brightest software engineers will result in better drugs, faster--at a time when pharmaceuticals companies, under the hammer of managed care, avidly seek the newest and the best. That creates a big business opportunity for small companies to sell their specialized knowledge and capture a share of the roughly $30 billion spent each year on drug development. By signing large deals and pursuing separate projects with a number of pharmaceuticals partners, they can attain profitability more quickly than companies that bet everything on a single product. Internal drug development programs that could produce blockbusters provide extra juice for investors.

Already there are very different business models. Incyte Pharmaceuticals focuses on bioinformatics, building comprehensive databases of genetic information that drug companies pay to use. The company is much loved by Wall Street: The stock has gone up 57% this year. Lesser-known companies that haven't yet hit profitability--and whose stocks are still somewhat earthbound--include Affymetrix, which specializes in making silicon chips coated with DNA for genetic analysis; and Sequana Therapeutics and Myriad Genetics, both of which seek specific genes. Sequana has discovered genes involved in obesity and melanoma; Myriad found brca1, a gene implicated in breast cancer. Amid the avalanche of information, analyst Scott Sacane at Montgomery says, "any discovery that sheds light on human disease is worth a lot of money." According to Sacane, the "next generation of genomics" will be pioneered by companies like Cadus Pharmaceutical and Ribozyme, which step further into drug development using gene-sequence information.