(MONEY Magazine) – How about a round of doubles? no, we don't mean tennis. we're talking about investments that could double in value over the next five years. Of course, if you're just beginning to learn the ways of Wall Street or aren't yet in a position to take risks with your money, just keep polishing your backhand. But if you're an established investor with a well-diversified stake of at least $30,000 or so, you may want to consider a flier on some of the potential winners we evaluate below. "For investors who can keep a long-term outlook, targeting maybe 10% of a portfolio in investments that could double in five years is a good idea," says No-Load Fund Analyst editor Ken Gregory, who deals frequently with the pivotal question of asset allocation.

First, let's put this ambitious goal in perspective: Doubling your money in five years isn't easy, but neither is it a fantasy like winning the lottery. To do it, you need an annual average return of 14.9%. Yes, that's about 1.5 times the 10% annual long-term total return of equities in Standard & Poor's 500-stock average. In the five years since Standard & Poor's started tracking such numbers, though, 147 of the 500 stocks in its index would have doubled your money with dividends reinvested.

But be warned: In gunning for big gainers, you can hit or miss.big. The Brazil Fund, which we recommended in August 1991, justified our faith by doubling within three years. But IBM dropped 36% over the next three years as its mainframe business shriveled in the face of competition from PCs.

For this story, Money explored four methods to ferret out doubles, consulting two dozen top investment advisers and securities analysts. With these sources, we've searched companies that promise consistent above-average growth in earnings, dividends or both. We also screened mutual funds that specialize in fast-growing small companies. We've considered investments that have been knocked down sharply but promise to rebound-such as emerging market stocks and bonds. And, finally, based on Money's view that interest rates will fall sharply over the next three years (see last month's Money Forecast), we sought investments set to rocket if rates plummet. What follows are our 12 best bets and our rationale:

GOING FOR GROWTH-POWERED GAINS

With U.S. economic growth cooling to an estimated 2.5% a year, stocks of companies that can post dependable double-digit earnings increases are likely to outperform the pack. In this category, we zero in on an aggressive mutual fund targeting high-growth small companies. And we feature two stock picks from Dallas money manager Susan Byrne, 48; her Westwood Equity Fund has chalked up an 8.8% annual gain over the past three years, vs. 7.1% for the average stock fund.

Boeing (ticker symbol: ba; recently traded on the New York Stock Exchange at $53; dividend yield: 1.9%). Boeing's business tends to move in five- to six-year cycles based on world airlines' need to upgrade their fleets. The $22 billion Seattle plane maker now seems poised for a steep ascent. Byrne expects Boeing to snag about half of the 6,700 new aircraft orders she projects over the next five years (vs. 3,000 over the past five). Among the propitious signs: Boeing, which gets 57% of its revenues from foreign customers, just won the bidding for 35 new 737 jetliners from the Scandinavian Airlines System (SAS). And this month it begins delivering its new 777 generation of planes, which analysts estimate will attract 200 orders this year. Moreover, Boeing will be building its planes with fewer employees after laying off an estimated 7,000 of its 123,000 workers this year. Byrne sees a recovery in earnings from about $2 a share this year to perhaps $2.65 in 1996, followed by a steady climb to $10 by 2001. She projects that by 2000 the stock will be selling at around 10 times estimated earnings for 2001, which would put it over $100.

Lockheed Martin (lmt; NYSE, $51.75; no yield). With the Pentagon budget down 9% over the past three years, stocks of military contractors have been strafed. But the just-completed merger of Lockheed and Martin Marietta has created a $23 billion firm that seems likely to lead the market, grabbing 15% of the estimated $400 billion in new government contracts awarded over the next five years. Moreover, Lockheed Martin (based in Bethesda, Md.) plans to slash operating costs by $2 billion to $3 billion over the next five years. The combination of sales growth and cost cutting, Byrne estimates, will inflate earnings an average of 15% a year, enough for a double even without any improvement in its depressed price/ earnings ratio of 9.1. "Even if people hate defense stocks in 2000 as much as they do today, which may well not be true, we could get the double," she says. In addition, Lockheed Martin will enjoy $800 million in free cash flow that Byrne anticipates will be put toward raising its dividend and buying back stock, helping to boost the share price.

Wasatch Aggressive Equity Fund (no load; 1.5% expense ratio; 800-345-7460). As a group, small stocks have outperformed their leviathan brethren, returning an annual 12.2% over the past 69 years vs. 10.2% for the large-company stocks in the S&P 500, reports Chicago's Ibbotson Associates. But trolling for small fish is tricky: Research tends to be spotty and the risks of landing a loser are high. So for small-capitalization equities, we recommend sticking with mutual funds. In a Money screen, Wasatch Aggressive Equity emerged with one of the highest portfolio earnings growth rates (27%) among all funds whose holdings had a median market value of less than $300 million. Boasting an average annual return of 16.7%, Wasatch more than doubled shareholders' money over the past five years and shows no signs of flagging. And with just $90 million in assets, it remains lithe enough to maneuver profitably among tiny stocks with stellar prospects.

The fund's four-member management team aims for a measure of stability by keeping half the assets of the 45-stock portfolio in mid-size, dependable growth companies. The other half goes into high-flying "emerging growth" companies, sometimes with revenues of less than $25 million, such as $22 million InterCel, an Alabama-based cellular-phone service. "We are buying companies so small that there are no or very few analysts following them," says lead manager Sam Stewart, 52, who has headed the fund since its 1986 inception. "Thus we hope to get a big price boost when other analysts and investors get interested later."

PLAYING FOR A DOUBLE ON DIVIDENDS

Steady dividend growth can give a similar booster shot to stocks; after all, investors bid up share prices in expectation of future returns-whether those returns come as income or capital gains. To spot companies strong enough to pump up their profits as well as their payouts, we consulted lead manager John Snyder of John Hancock Sovereign Investors Fund, which considers only stocks of companies that have raised dividends for 10 straight years. We then supplemented his two dynamic dividend favorites with an electric utility other pros tout as a possible two-bagger.

Alco Standard (ASN; NYSE, $73.25; 1.4% yield). As the nation's largest independent distributor of business machines and paper for office and other uses, $8 billion Alco is riding the booming demand for fax machines and color copiers. Snyder sees earnings growing at least 16% a year over the next five years and projects annual dividend growth of about 13%. "This company generates tremendous cash flow, and it will pass some of it along to shareholders," he predicts. Alco recently was selling at 20 times its 1995 estimated earnings, compared with about 15.2 for the S&P 500. But its projected earnings and dividend growth are both at least double those of the index. Snyder forecasts the stock will top $140 by 2000.

Abbott Laboratories (ABT; NYSE, $36.50; 2.3% yield). Though pharmaceutical stocks have bounced back from their 1994 health-care-reform swoon, Snyder believes $9 billion Abbott remains undervalued in relation to its prospective earnings and dividend growth. In addition to new asthma and ulcer drugs expected to receive government approval this year, Abbott is bringing out new cost-efficient diagnostic equipment for hospitals and laboratories. Snyder and other analysts project Abbott's earnings growth at 13% a year over the next five years while dividends climb 12% annually. That combination should produce a double, Snyder believes, even if investors do not boost the price/earnings ratio above the recent 17.3 level.

CMS Energy (CMS; NYSE, $23.25; 3.6% yield). Utility analyst Barry Abramson of Prudential Securities believes $3.6 billion CMS, which supplies electricity and gas to southern Michigan outside Detroit, is a strong candidate to thrive in the increasingly competitive environment for utilities. CMS has a subsidiary that explores for oil and natural gas and markets the gas; the unit also invests in power plants in fast-growing countries such as India, the Philippines and Argentina. Such operations represent only 7% of revenues now. "But significant earnings growth from the nonutility side of the business gives CMS a better earnings outlook than any other stock we follow," says Abramson. He predicts that a combination of 5% yearly earnings growth plus dividend growth of 12% will propel the stock above $46 by 2000.

GETTING A BIG BOUNCE FROM THE BRADY BUNCH

On wall street, it's known as the Tequila effect--the hangover hammering many emerging markets in the aftermath of Mexico's peso devaluation debacle. But many overseas veterans believe panicky investors have driven some markets down too far. Over the next three to five years, Latin and Asian economies are projected to grow at an average 6%, inflation-adjusted rate--twice the average for developed economies. That superior performance, investment pros believe, will inevitably resuscitate many a battered market around the globe.

Our three choices are all closed-end mutual funds. Such funds trade on an exchange like stocks, at prices that can be greater or less than their net asset values (NAVs), depending upon investor demand. We like closed-ends because when bought at a discount, they can deliver double-barreled gains: Their NAVs can rise and the discounts can narrow or, better still, turn into premiums. To further improve the odds of a double, we've selected funds that concentrate their holdings primarily on a single region or type of security; that tight focus makes them both potentially more profitable--and also dicier--than broader portfolios. (For a discussion of more widely diversified emerging market funds, see Fund Watch on page 61.)

As our guide to the best opportunities in emerging markets, we chose global closed-end fund analyst Michael Porter, 39, of Smith Barney in New York City, one of the few to make a full-time specialty of international closed-end funds. In addition to presciently picking the Brazil fund for Money in 1991, Porter cited the Korea Fund as a three-year double in December 1993. After 15 months, it is up 33%, a third of the way to the goal.

Scudder World Income Opportunities (swi; NYSE, $11.25; 1% discount). Among the best shots for a double in emerging markets today, according to Porter, are Brady bonds issued by nations in Latin America, Eastern Europe, Asia and Africa. Named for former U.S. Treasury Secretary Nicholas Brady, who devised them as a way to ease the Third World's debt crisis, they offer several pluses. They are denominated in dollars, and thus immune to swings in exchange rates. Further, if the nation runs into interim economic problems, up to three semiannual interest payments are secured with U.S. corporate bonds. Of course, there's the risk that an issuing nation would not resume interest payments. But analysts believe such a dire development is unlikely, because it would cut off access to the foreign investment capital these nations so desperately need. Finally, the U.S. Treasury guarantees eventual payback of principal (although it would take up to 30 years). Now the payoff: Price declines of 18% since December have knocked down many Brady bonds to about $300 to $480 per $1,000 of face value, producing current yields of 16% to 18%.

Porter thinks this Scudder entry is the best buy among closed-end funds holding Brady bonds. It has nearly half its assets in Bradys from Brazil, Argentina, Peru and Venezuela, with the balance in government and corporate debt from other emerging economies. And Porter notes that manager Isabel Saltzman, 40, is a tested pro. "You want specialist managers who know how to take advantage of adversity," he says, "not somebody buying a few Latin issues heavily promoted by Wall Street." As confidence in emerging markets rebounds, the bonds the fund holds will gain about 10% a year in price, Porter estimates. That gain, combined with five years of the fund's 12% yield, would add up to a 110% profit.

G.T. Global Developing Markets (gtd; NYSE, $8.50; 14% discount). For investors who like to limit their potential downside by buying at a big discount, Porter suggests this fund, run by Jim Bogin, 37. Its portfolio mixes 39% Brady and other emerging market bonds with 55% mostly Latin equities and recently held 6% cash. G.T. Financial management is one of the most experienced companies in Latin markets, says Porter, who adds that the equity stake should help it turn in a double when Latin markets rebound.

Templeton Dragon Fund (tdf; NYSE, $11.75; 14% discount). Run by the dean of emerging market managers, Mark Mobius, 58, this fund will concentrate 45% of its assets on equities of companies generating at least half their revenues either in China or Hong Kong, with another 20% in stocks from other Asian nations. Because the fund launched only last September, Mobius recently still had 71% in cash. Most of his investments so far have been seeming bargains he picked up in Hong Kong, where the market fell 24% during the first half of '94. As Porter sees it, the real appeal here is the chance to buy the hard-won worldly wisdom of Mobius at a discount. By contrast, Mobius' broader closed-end Templeton Emerging Markets fund, which has posted a five-year average annual return of 25%, sells at a 17% premium. "Mobius is the premier emerging market manager," says Porter.

TAKING A FLIER ON FALLING RATES

With the federal reserve board signaling that it may be done raising rates, Money's chief investment strategist Michael Sivy is forecasting that long-term rates will fall from the recent 7.4% to around 5.5% over the next three years. That would bring fat capital gains for bondholders. With this possibility in mind, we got two bond picks from Richard Lehmann, 52, editor of the Income Securities Advisor newsletter ($125 a year; 800-472-2680). Our final choice is a stock tied to the housing industry--historically one of the first groups to sizzle when interest rates fall.

General Motors Acceptance Corp. zero-coupon bond of 2012 (NYSE, $240 per $1,000; 8.5% yield to maturity). Zero-coupon bonds pay no interest; instead, you buy them at a discount and receive their full face value at maturity. The lack of regular payouts makes zeros far more volatile than standard bonds--which can bring trouble when rates climb but a bonanza when they fall. "If overall interest rates come down two percentage points, which we think is likely, you would get a double right there with this GMAC issue," notes Lehmann. Backed by General Motors auto loans, these bonds have a low risk of default. And they offer an advantage over almost all other zeros. Usually, you must pay annual taxes on the interest your zero accrues each year even though you receive no cash. But the GMAC and two other zeros (another GMAC and one from an Exxon subsidiary) escape the "phantom interest" rule because they were issued in 1982 before the IRS made that regulation. Thus you pay tax only when you sell your bonds or they mature.

Greyhound Lines 10% bonds of 2001 (ASE, $723 per $1,000; current yield: 13.8%). After a string of losses that brought it to the brink of bankruptcy, the nation's largest intercity bus company has installed new management and completed a financial restructuring to slash its debt from 78% of its total capitalization to about 50%. Lehmann believes Greyhound is now healthy enough to keep up its interest payments. "As Greyhound's improved situation becomes clearer, I think these bonds will get a credit upgrade from the recent level of CCC," he predicts. "That could boost the price by one-third." Even without an upgrade, the normal price appreciation that occurs as a bond nears maturity would likely complete the double by 2000. The risk is that Greyhound takes another wrong turn and fails to make interest payments. But Lehmann believes that steady business from budget-conscious travelers will keep Greyhound on the road to recovery.

Countrywide Credit Industries (ccr; NYSE, $17.50, 1.8% yield). Editor John Dessauer of the newsletter Dessauer's Investor's World ($100 a year; 800-777-5005) believes Countrywide is a shrewd way to play falling rates. The nation's largest mortgage servicing firm and a major mortgage lender in its own right, Countrywide saw its stock drop 56% last year as higher rates had investors anticipating a falloff in the mortgage business. The stock remains nearly one-fourth below its $23 peak, and with its servicing business providing double-digit earnings gains, Dessauer figures the stock is now a bargain at 11.9 times earnings. "When interest rates fall again, Countrywide not only will profit from new mortgage originations but will also expand the size of its servicing portfolio," he predicts. "Earnings will start growing 20% or more a year, and the stock will follow to a double."

And now that we're done discussing investment doubles, tennis, anyone?