Taking stock: Indiana public companies picked to do well next year.

• Author: Held, Shari
• Position: INVESTMENTS - Company overview

INDIANA HAS HAD ITS share of stock stories over the last year. Indianapolis-based Interactive Intelligence (ININ), a provider of communications software, came on like gangbusters, seeing its stock increase by 250 percent. "If you look at the 74 publicly traded companies within Indiana, it was the highest-performing one," says Thomas Blair, Indianapolis-based senior portfolio manager and vice president Fifth Third Investment Advisors. "It is considered a very small company ($300 million) but it has been very successful in exploiting a large market."

Fifth Third Investment Advisors, a division of Cincinnati-based Fifth Third Bancorp, has 95 portfolio managers overall managing $37 billion in 17 offices in seven Midwest states and Florida. Its Indiana offices are located in Indianapolis and Evansville.

Another top performer was Fort Wayne-based Steel Dynamics (STLD), a $2.8 billion market-capitalization company "In the trailing year (based on November 2005 and November 2006 figures) the stock is up 97 percent," says Adrian Miller, investment manager, Wells Fargo Private Client Services. "But the big story was how successfully this sleepy little company in Indiana competed against the big boys."

Wells Fargo Private Client Services provides financial products and services through various banking and brokerage affiliates of San Francisco-based Wells Fargo Co. It oversees more than $204 billion in assets.

According to Blair, Indiana companies did quite well overall in 2006. "Indiana-based companies are up 14.5 percent year-to-date versus 10.7 percent for the Standard & Poor's 500 in 2006. What's more interesting is, over the past five years, Indiana companies have returned 14.9 percent versus 6.5 percent for the Standard & Poor's 500--an above average performance."

Looking forward to 2007. The slowing economy, continued weakness of the housing market and high consumer debt has led some, but not all, financial experts to predict further slowing of the economy or even a recession.

"I think to make some judgments about what is going to happen in 2007 you have got to stay away from the front page of the major media outlets and the talking heads on television," says Thomas Curran, senior vice president, Private Client Group and Indianapolis Branch office manager of Morgan Keegan & Co. "To those who say the slowing economy is concerning, one consideration should be that an economic slowdown is not always bad for stocks. From the start of previous mid-cycle slowdowns (July 1984 and December 1994), the next year or so saw the S&P 500 and the NASDAQ rally handsomely Currently, with stocks pretty well undervalued to bonds, we are positioned like those other two time periods. That to me points to a fairly robust stock market moving forward. The S&P 500 is currently trading below a long-term trend line--we've been below that trend since...