STOCKS | Hailed as growth stocks, these companies have been BLINDSIDED instead.

AS MORE PEOPLE undergo laser surgery to improve their eyesight, some investors see a coming boom in the stocks of companies that offer laser vision correction. Is this a farsighted forecast, or myopic wishful thinking?

Correcting vision problems with laser surgery has become a mini industry In the most popular procedure, Lasik, an ophthalmologist cuts the patient’s cornea with a specially designed scalpel, lifts it back like a flap, and then applies a laser beam to reshape the underlying tissue. While the description of the procedure is enough to give most people the creeps, patients actually recover in a matter of hours or days and suffer drastically less discomfort than with old-style vision-correction surgery.

The promise of quick recovery, stellar results (about four out of five patients with low to moderate nearsightedness recover to 20-20 acuity) and applicability to a wide range of vision conditions are sparking an explosion in laser eye surgery, notes Advest analyst Ted Huber. The money spent on such surgery was expected to double in 1999 to almost $2 billion, and jump 45% more this year. Yet only 3% of the 57 million prospective patients in the U.S. underwent the procedure through the end of 1999. Analysts predict that the leading companies–surgery providers TLC Laser Eye Centers (symbol TLCV, Nasdaq, recent price $14) and Laser Vision Centers (LVCI, Nasdaq, $12), and laser maker Visx (VISX, Nasdaq, $52)–will see earnings rise 30% to 45% annually over the next three years.

The stocks, however, aren’t clear-cut investments. Concerns about profits at surgical centers have depressed prices. Shares of TLC recently fell 27% in a single day after the company missed analysts’ earnings estimates, thanks to increased administrative costs. An unfavorable ruling in a patent dispute sent shares of Visx, which makes the lasers used in about three-fourths of all Lasik operations, reeling 41% in one day.