A sweet balance sheet: D. Dennis Hinton's reliance on debt-free firms garnered great results.

As the chief money manager and executive vice president of Atlanta-based investment banking firm The Resource Group, D. Dennis Hinton prides himself on being able to deliver positive returns for his investors. "The commitment that I try to make to clients is that I will outperform the market by a minimum of 15% or 20%," he says.

The portfolio of five stocks Hinton recommended to BLACK ENTERPRISE last year did just that, garnering a 12.75% return during the 52-week period from Dec. 4, 2003, to Dec. 3. 2004. It outperformed the Dow Jones Industrial Average, which rose 6.66%, and surpassed the S&P 500 Index, which went up 11.35%, during the same time period.

Hinton, who likes to look for companies that have good balance sheets and are on the brink of a turnaround, says one key to the favorable performance of his portfolio was the fact that "the dollar remained weak all year, [which] really helped companies that market and distribute their products internationally." Three of the five companies he selected benefited from a weak U.S. dollar.

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Among the stocks Hinton picked that have international exposure, Bike Inc. (NYSE: NKE) was the best performer by far. The leading manufacturer of sports and fitness products maintained its dominance in its industry, sprinting to a 34.37% gain, which lifted its stock price from $64.35 to $86.47 a share. "Not only did [Nike] sign LeBron James last year but they also came out with a new addition to the Jordan line, which helped sales," says Hinton.

Fortune Brands Inc. (NYSE: FO), the maker of home products, golf items, and wines and spirits, grew its shares from $68.79 to $78.05, an increase of 13.46%. "Any time you sell golf products and spirits, you've got a winner," says Hinton.

The Yankee Candle Co. Inc. (NYSE: YCC) also fared well. The maker of scented candles and candle accessories exports an increasing volume of their product to Europe, and its share price jumped 6.68%; going from $29.17 to $31.12. "Yankee Candle continues being the leader in scented candles, and they announced a $100 million stock repurchase, which always bodes well for the underlying equity [of a company]," says Hinton.

Domestic electronics retailer Best Buy Co. Inc. (NYSE: BBY) rode recent price reductions for DVD players and items like the Apple iPod to a stock price increase of 5.81%. "HDTVs, flat screen TVs, computers, and digital cameras have all come down in price, so sales have increased dramatically," says Hinton. The price of Best Buy shares rose from $53.72 to $56.84.

The increased popularity of gambling resulted in a 3.43% increase in the stock price of Hinton's final selection, International Game Technology Inc. (NYSE: IGT). "The popularity of video lotteries and poker have given attention to the gaming industry," says Hinton. As a result, shares of the slot machine and video game manufacturer edged up from $33.48 to $34.63.