(MONEY Magazine) – You've probably never heard of Advo, but the Windsor, Conn. firm (estimated 1993 revenues: $845 million) has almost certainly heard of you. Each week, Advo, the nation's leading direct marketer, floods 53 million home mailboxes with thick envelopes of ads and coupons from supermarkets and other local merchants as well as national clients such as Pizza Hut and Wal-Mart. Advo's mailing list of 108 million U.S. households -- 98% of the U.S. total -- ''would be hard for a competitor to reproduce,'' says analyst Kevin Clark of Advest in Hartford, Conn. Industry revenues grew 12% annually in the 1980s; since then, they've continued to advance 4% a year, despite the recession, because for many merchants direct mail reaches customers more efficiently than, say, newspaper ads. Despite Advo's huge list of 27,000 clients, the company was losing money as recently as 1988 because of spiraling costs. Then Robert Kamerschen, 57, took over as chairman and quickly automated and streamlined the company's operations, trimming manpower spending per direct-mail packet by 30%. In addition, he added in-house mail sorting that reduced the cost of postal rate increases. The result: Since 1989, Advo's profits have risen fourfold to $20.5 million and its share price has soared from $5 to $29. As advertisers continue to shift to direct mail, analyst John Morris of Prudential Securities expects the company's revenues to rise 7% for the fiscal year ending in September and its earnings to climb 23% to $1.35 a share. Over the next five years, he and other analysts believe profits can grow 20% annually as Advo stuffs more coupons and ads into its envelopes. For example, one additional ad can make a direct-mail package 50% more profitable. Like the shares of many fast-growing companies, Advo's stock is volatile and suitable only for investors willing to take a bit more risk than average for a potentially bigger gain. Clark thinks the stock, which just began paying an 8 cents annual dividend and sells at 21 times 1993 earnings, could rise 38% to $40 within 18 months, or $32 after adjusting for a five-for-four stock split expected in March.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: ADVO