Waiting for profits to improve: Dennis Hinton of The Resource Group says a good balance sheet and cash on hand are key for growth.

When D. Dennis Hinton select stocks for his clients, he looks for companies on the brink of a brink of a turnaround that have a good balance sheet and cash on hand.

Hinton is the chief money manager and executive vice president of The Resource Group, an Atlanta-based investment banking firm. With $160 million under management, The Resource Group serves small business owners and business professionals who typically range in age from their late 20s to their mid-50s. The company has three divisions; financial planning, research and analysis, and money management.

"We either have a young, hip-hop 30-year-old walk into the office or we have a seasoned business professional who's 55," says Hinton. "Seventy percent of every dollar we manage is retirement dollars--401 (k)s, SEPS, and IRAs. In that particular area we tend to be very conservative."

Hinton also delivers financial analysis for NBC affiliate WXIA-TV in Atlanta and says that over the next 12 to 18 months, the economy should improve, even while the weak labor market continues to stymie an otherwise brighter economic picture. "I think the economy is in recovery mode, which has been confirmed by the recent strength in manufacturing and the service industry. Unfortunately, employment has yet to catch up with the rest of the economy," he says.

Hinton believes several companies have the potential to gain more than 35% in their stock prices as their profits improve. One such company is International Game Technology (NYSE: IGT), which designs, manufactures, and distributes computerized gaming products and systems such as slot machines and video game machines. In addition to having a great research and development pipeline, Hinton says the company will also benefit from the fact that it has several revenue streams in a growth industry.

Another company benefiting from its diverse product lines is Fortune Brands Inc. (NYSE: FO), which manufactures and sells home products, spirits and wines, golf items, and office products. "I like the company because a lot of their products are sold in Europe," says Hinton, noting that with the Euro and the British pound climbing in value against the U.S. dollar, Fortune Brands could increase market share due to its products selling more cheaply abroad.

Hinton believes the Yankee Candle Company Inc. (NYSE: YCC) is likely to boost profits because of the growing popularity of fragranced candles and the growing exports of its products to Europe. He says the company's business model, which consists of marketing products through wholesale customers who operate more than 14,000 gift store locations, has proven very successful. The company's low debt levels are another plus.

Retailer Best Buy Co. Inc. (NYSE: BBY), which sells a wide range of electronic products, also has growth potential. "Every time you turn around, they're building a new Best Buy," says Hinton. "They're diversified, have excellent price points, and have an excellent management team."

Finally, Hinton believes Nike Inc. (NYSE: NKE) will see the sales of its sports and fitness products rise because the company continues to make quality products that are sold globally. And Nike's recent signing of basketball star LeBron James as a spokesman for the company is an added attraction that should lift profits.

DENNIS HINTON'S
Private Screening Picks

Company                                         12- to 18-Month
Exchange: Symbol            Price *             Price Target

International Game Tech.    $33.90              $60.00
NYSE: IGT

Best Buy Co. Inc.           $54.04              $75.00
NYSE:BBY

Fortune Brands Inc.         $70.00              $100.00
NYSE: FO

Yankee Candle Co. Inc.      $29.17              $40.00
NYSE: YCC

Nike Inc.                   $65.06              $90.00
NYSE: NKE

                                                Est. 5-Yr.
Company                     P/E on Projected    Annual EPS
Exchange: Symbol            2004 Earnings       Growth Rate

International Game Tech.    29.8%               16.2%
NYSE: IGT

Best Buy Co. Inc.           22.3%               15.4%
NYSE:BBY

Fortune Brands Inc.         18.9%               13.3%
NYSE: FO

Yankee Candle Co. Inc.      18.9%               NA
NYSE: YCC

Nike Inc.                   20.9%               13.5%
NYSE: NKE

Company
Exchange: Symbol            Why Stock Will Outperform

International Game Tech.    The gaming industry is a growth
NYSE: IGT                   industry and the company has
                            multiple revenue streams.

Best Buy Co. Inc.           Sales of DVDs, computers, and
NYSE:BBY                    other hardware will increase.
                            Company will benefit from expansion.

Fortune Brands Inc.         Company's European sales will
NYSE: FO                    benefit due to weak U.S. dollar.
                            Sales of golf products will surge.

Yankee Candle Co. Inc.      Company will continue to benefit
NYSE: YCC                   from the popularity and high
                            sales of scented candles.

Nike Inc.                   Global sales should benefit from a
NYSE: NKE                   weak U.S. dollar. Basketball star
                            LeBron lames as newest spokesperson
                            should lift profits.

* STOCK PRICES AS OF DEC. 4, 2003. SOURCES: THE RESOURCE GROUP,
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