Cells calls.

• Position: Vanguard Cellular Systems Inc. - On The Market

Cells calls

If $1,000 of stock grows to $2,333 in two years, you might wonder how much growth is left in it.

It depends on the company and the industry. The industry we're talking about is cellular telephones, and the company whose stock has grown so dramatically is Vanguard Cellular Systems Inc. (VCELANASDAQ). Some believers are convinced that their investment will simply keep on growing.

Vanguard has been a hot stock almost from its initial public offering at $18 a share in March 1988. Within a year, the stock split three-for-two, and in early April, shares were selling at about $28, an impressive 133 percent over the split-adjusted IPO price of $12.

Vanguard's secret? It got into cellular telephones early, when Wall Street sharpies knew that putting their money into a brand-new invention could pay off big.

"We'll go from being tethered to a line to being truly in an era of personal communications where you can [phone] a person anywhere," says John Sherman, a Scott & Stringfellow vice president in Kinston. "The excitement to me is being on the ground floor of a new technology that shows tremendous growth potential."

The stock price reached $41 last year, but this year's drop has led some to question whether its glory days are in the past. Others say the best is yet to come. They point to numbers that are heading in the right directions: more subscribers, lower prices.

The cellular-phone industry signed up its millionth customer in 1987, after only four years in operation. As the industry's association president boasted at the time, that's quicker than telephones (which took more than 20 years), television (11 years) and cable (13 years). Cellular subscribers now top 3.5 million.

No longer is cellular confined to yuppie developers and their Realtor wives. Car phones are starting to be seen as a necessary business tool, like computers and fax machines.

Demand is rising as prices fall. A portable Motorola that will fit in your shirt pocket sold for about $2,500 a year ago. It goes for less than $1,500 now. And these days, you can get a car phone, installed, for about $400.

Vanguard is based in Greensboro, but it does most of its business outside the state, along the East Coast. The heart of its operation is its so-called Pennsylvania Supersystem - a cellular network that covers 9,400 square miles and catches calls from drivers traveling in and out of nearby New York, Philadelphia, Washington and Baltimore.

So far, Vanguard has had a blessed...