A rebound to riches: Hamilton Lewis' portfolio of downtrodden stocks gained a stellar 86%.

Hamilton Lewis prides himself on his ability to select companies that are ready to rebound after having been temporarily punished by the market. The owner of Houston-based Hamilton Lewis Capital Management says buying stocks at a discount is his key to maximizing returns. "I like to come in with courage on the low end of a stock's cycle, when buyers are depressed and news reports for the company are ugly," Lewis explained before offering BLACK ENTERPRISE an exclusive portfolio of five stocks last year. "That gives us the potential for greater upside."

Lewis couldn't have achieved much better than the extraordinary 85.98% returns his stock selections garnered over the 52-week period from Jan. 17, 2003 to Jan. 16, 2004. By comparison, the Dow Jones Industrial Average rose 23.45% and the S&P 500 gained 26.40%, respectively, over the same period.

Lewis's first two picks were from the retail sector, which was reeling from a weak economy at the start of last year. With the housing market hitting its highest levels in 25 years, home improvement center Home Depot (NYSE: HD) rebounded nicely with a 55.77% gain, going from $22.43 to $34.94.

Electronics seller Best Buy (NYSE: BBY) also benefited from increasing consumer demand for the newest in entertainment technology and the regular cycle of replacing business technology. Although Best Buy had fallen from more than $50 per share to a shade less than $20 in 2002, last year, the company came roaring back and catapulted 94.48%, going from $27.70 to $53.87.

Building on the strength of its anti-virus software in 2002, Symantec (Nasdaq: SYMC) had a 2-for-1 stock split that increased its stock price from a split-adjusted $22.52 to $37.00, up 64.30%. The introduction of new threats to computers, such as the Mydoom computer virus, ensure that Symantec's products will be in high demand for some time.

Lucent Technologies (NYSE: LU), a stock that had probably fallen the farthest out of all of Lewis' selections, exploded back to profitability, posting a whopping 181.10% gain, going from $1.64 to $4.61. How did Lucent do it? A combination of cost-cutting measures and layoffs to improve earnings, and its ability to increase market share in spite of its troubles, fueled optimism for this former industry leader.

And finally, stockholders of generic pharmaceuticals maker Barr Laboratories (NYSE: BRL) also had a stock split in 2003. The company's pipeline of new drugs--which includes the oral contraceptive Seasonale and mefloquine hydrochloride tablets, a malaria treatment--fueled a 3-for-2 split, taking its price from a split-adjusted $52.79 to $70.88, up 34.27%.