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All-Star Analyst Recommends Argosy, IGT

20 August 2002

CHICAGO, Illinois – (Press Release) -- Whether you're a high stakes gambler or a weekend bingo player, there are more options available than ever before. UBS Warburg 5-Star analyst Robin Farley, whose +11% return through July, proves she knows when to hold 'em, when to fold 'em, when to walk away and when to run. Find out which gaming stocks might not be such a gamble for investors over the next 12 months.

Here are the details on Analyst Robin Farley's Stock Picks for today:

Argosy Gaming Corporation (NYSE: AGY) owns and operates six riverboat casinos in St. Louis, Kansas City, Baton Rouge, Sioux City, Lawrenceburg, Indiana and Joliet, Illinois. AGY benefits from being in an earlier stage of growth then many issues in Las Vegas, giving investors a much better chance for profits. The company's Indiana operation should pick up some momentum with the advent of dockside operations, which began earlier-than-expected on August 1. Dockside operations make the gambling experience much easier for customers and, therefore, gives AGY more flexibility to operate. Farley believes that dockside operations will unlock greater revenues for AGY, as it did for companies in Illinois. She's set a 12-month price target at $32.50, based on a 6.6 - 6.7x multiple of the 2003 EBITDA estimate. Earnings estimates for 2002 and 2003 are set at $2.80 and $2.85 respectively.

International Game Technology (NYSE: IGT) manufactures computerized casino gaming products. The company reported a strong third quarter, especially when it comes to free cash flow, which came in at $108 million. IGT repurchased 3.5 million shares in the quarter and paid down all the debt from its acquisition of Anchor Gaming, a diversified technology company with operations around the world. Farley expects management to continue buying back shares, thereby returning its ample free cash flow to shareholders, which should help the IGT's balance sheet and financial position heading into the future. Due, in part, to core business growth, accretive acquisitions and strong free cash flow, Farley has rated IGT as a Buy. She has set a 12-month price target of $70, based on an 18x multiple of the fiscal 2003 EPS estimate. Farley estimates 2002 and 2003 earnings at $3.34 and $3.84 respectively.

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