States Play the Slots, Benefiting IGT

ORLANDO, Fla. (TheStreet) -- Don Wordell, manager of the RidgeWorth Mid-Cap Value Equity Fund(SAMVX), says slot-machine maker IGT(IGT) may be a jackpot for investors as cash-strapped states tap into gaming to boost revenue.

The $843 million mutual fund, which garners the highest rating from Morningstar(MORN), has rocketed 85% over the past year, better than 84% of its rivals.

Welcome to TheStreet's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the economy in a five-question format.

Will a gaming company like IGT thrive in a sluggish economy?

Wordell: We like IGT because there is a tremendous amount of pressure on states' budgets in the country. States have to find a way to raise revenues. So short of raising taxes on everyone, they can generate revenues by other means, like adding gaming. When you combine increased gaming with upgraded casinos, that's a tremendous opportunity for IGT over the next two years.

Another stock you like is Astoria Financial(AF). People are wary of banks after their big run-up.

Wordell: This one runs through our process very well: dividends, valuation, fundamentals. It has a 4% dividend yield and it's trading at 7 times what we think is a normalized earnings estimate in two to three years. This company has a great management team with a really strong franchise.

Why is Ingersoll-Rand(IR) attractive?

Wordell: We like Ingersoll-Rand because of its massive restructuring. New management has come in and turned around the company. They made an acquisition at the peak of the last cycle, which was painful. However, looking forward, the fact that there is pent-up demand for heating, ventilation and air conditioning (HVAC) in the U.S. and globally, and if energy prices keep going higher, then one of the best things you can do is retrofit with new HVAC systems to save on costs. Ingersoll is going to benefit tremendously from that.

Speaking of acquisitions, Baker Hughes(BHI) is still trying to get the purchase of BJ Services(BJS) done. What happens when that's completed?

Wordell: That's going to be really great for Baker Hughes. The land-rig count in the U.S. is starting to grow again. BJ Services is a pressure pumper, a service for getting natural gas and oil out of the ground. They bought that asset at the bottom of the cycle and paid a fair price for it. It's going to be very accretive to Baker Hughes over the long term.