Even though several manufacturers on the roster can rightly claim to be undervalued by analysts and investors, there's no question that the stocks of IndustryWeek's 100 Best-Managed Companies collectively are flying high. Measured on total return to shareholders, which takes into account reinvested dividends and stock splits, the IW 100 posted a stunning gain of 155% during the three-year period ending Sept. 30, 1999. In doing so, they outperformed both the Dow Jones Industrial Average (DJIA), up 90% during the same period, and S&P's Industrial Average, which was up 102%. For the one-year-period ending Sept. 30, the IW 100 recorded a 48% increase, compared with 33% for the DJIA and 31% for the S&P. As in 1998, technology and communications companies on the IW 100 roster were the best performers. In 1999 Qualcomm Inc. grabbed the top spot; the San Diego-based communications equipment manufacturer posted a one-year 689% return to shareholders. "Qualcomm is the darling of the [telecommunications] group," says Michael Ward, vice president and director of equity research at International Assets Advisory Corp., Winter Park, Fla. "It's one of the more visible companies out there." Qualcomm far outdistanced the company with the second highest return, Sun Microsystems Inc. However, shareholders of the Palo Alto, Calif.-based producer of computers and software probably aren't complaining too much; their investments rose 273% for the year. No. 3 on the IW 100 performance roster is Singapore-based Flextronics International Ltd. Shares in the contract manufacturer of printed-circuit-board assemblies and printers were up 228% for the year. International Assets' Ward credits the company's tremendous growth in revenue -- up 85% between 1998 and 1999 -- for much of the increase in its stock price. Taking the longer perspective of three-year returns to shareholders, two tech companies maintained the 1-2 rankings they held in 1998. Dell Computer Corp., Round Rock, Tex., topped the list with a return of 1,615%, followed by EMC Corp., Hopkinton, Mass., with a three-year 1,169% rate of return. Pharmaceutical companies are the surprise in the ranking of one-year rate-of-return: They're not at the very top of the list. As a group, pharmaceuticals returned an average of just 7% for the year ending Sept. 30, although they're up 115% during the last three years. Their decline reflects a reduction in Medicare payments by Uncle Sam and a resulting nervousness among investors, says Jeffrey C. Hooke, a Vienna, Va.-based investment banker and author of Security Analysis on Wall Street (1998, John Wiley & Sons). What's more, the 1998 blockbuster introduction of Viagra, an anti-impotence drug, was not repeated in 1999, Ward says. Other companies were victims of investors' love affairs with Internet and tech outfits, which diverted attention and dollars from their industries. As a group, food companies, for example, posted only a 4% increase in their rate of return for the year. Hooke attributes the mediocre showing to their inability to command price increases in today's low-inflation environment. Capital-goods manufacturers also tended to fall toward the middle and bottom of the rate-of-return list. Automobile and parts manufacturers, for instance, averaged a 2% return for the year and 51% during the last three years. The IW 100 is a global roster, recognizing the reality that managerial talent and leadership skills reside in all corners of the world. And CEOs and other senior corporate executives increasingly are competing around the world not only for customers, but also for investors, notes Michael Useem, a professor of management and director of the Center for Leadership & Change Management at the University of Pennsylvania's Wharton School, Philadelphia. "By virtue of the dismantling of borders, companies compete with each other worldwide for investors," he stresses. Indeed, the New York Stock Exchange currently lists more than 380 companies headquartered outside the U.S., a third more than were listed in 1996. These firms represent 48 countries and account for $4.5 trillion in market capitalization -- nearly one-third of the $15 trillion in global market capitalization on the Big Board. One consequence is that executives of large manufacturing companies, in particular, need to build trusting, effective relationships with stock analysts and money managers around the world. Execs are likely to be boarding planes more often as they head to such vital financial centers as London and Tokyo -- as well as to New York -- to present their companies' performances and prospects. "The top people -- CEOs, COOs, CFOs, and business-unit presidents -- all have to be in frequent, direct contact with the company's major stock analysts and top 25 investors," says Useem. To build investors' confidence, management needs to ensure that the company's financial statements are "transparent," advises Useem. Stated financial results need to accurately reflect what and how the company is doing. Yet American and foreign-based companies that list in the U.S. frequently grumble about the U.S. Securities & Exchange Commission's "burdensome" financial-reporting requirements. Some contend that gathering the information is arduous and that important information can get lost in all the detail. However, detailed disclosure raises the confidence level of investors -- and can benefit the companies in an unexpected way. Non-U.S. companies listing their stocks in the U.S. enjoy an annualized stock-price gain of about 12% in their first week on the exchange, says Wharton's Useem. Similar "bumps" aren't seen elsewhere.