BOSTON ( TheStreet) -- The tech industry is rife with innovative companies and lucrative investments. Here are three small-cap stocks that have trounced indices during the past year.3. Transcend Services ( TRCR) sells medical transcription software. Its product records voice data and then edits and formats it into electronic medical records. Transcription is a critical efficiency booster for health care providers. Transcend controls 3% of the market, putting it second to MedQuist ( MEDQ), which holds an 11% slice. The company boasts a 95% customer retention rate and a record of growth, regardless of economic conditions. During the past three years, Transcend has increased revenue 30% annually, on average, and boosted net income 67%. Fourth-quarter profit climbed 6.8% to $1.6 million, but earnings per share were unchanged at 17 cents. Revenue increased 67% to $21 million as Transcend added customers. Its operating margin narrowed from 19% to 16%. Transcend's stock commands a premium, trading at a price-to-projected-earnings ratio of 18. Nevertheless, it remains an attractive investment, ranking among our top 300 stocks. Its shares have gained 92% during the past year. 2. Veeco Instruments ( VECO) designs machines that make data storage equipment, semiconductors and solar panels. Despite a market value of $1.3 billion, the company has a diversified customer base that includes nanoscience researchers. Veeco swung to a fourth-quarter profit of $19 million, or 50 cents a share, from a loss of $74 million, or $2.35, a year earlier. Revenue increased 33% to $146 million. Veeco's operating margin widened from less than 1% to 13% as volume improved. Its balance sheet has $284 million of cash and $101 million of debt. A quick ratio of 2.6 demonstrates outstanding liquidity. Its stock has climbed almost sevenfold during the past year. Despite the heady run, Veeco shares are cheap at a price-to-projected-earnings ratio of 13, a 19% discount to the industry average. Among 12 analysts surveyed by Bloomberg, 10 recommend buying shares and the remainder advise holding them. JPMorgan ( JPM) offers the most bullish price target, predicting a 49% increase to $50. 1. Teltronics ( TELT), which makes hardware and software for telcom companies, has returned 5,344% during the past year. This micro-cap has a market value of $13 million and a beta of 4.1, which means it magnifies market swings. Investors seeking a speculative investment should consider the stock.