(Business Edge columnist Gyle Konotopetz regularly profiles the top stock picks of some of Canada's most accomplished investment pros.)
FEATURED PRO: Bill Harris is principal and portfolio manager with Avenue Investment Management (www.avenuemanagement.com), an investment counselling firm that manages equity and fixed-income accounts for clients. Avenue is also an adviser for the Terra Flow-Through Funds - tax-advantaged resource-based funds (www.terraresources.ca).
Harris's Perspective: "What I find exciting is that we're in a massive bear market in natural gas. In a historical context, it wouldn't seem like a bear market. A bear market would be $2 (US per mcf - thousand cubic feet) natural gas. It's now trading around $6. Natural gas at $6 is the equivalent of $36 (US per barrel) oil (the oil price was recently in the $70 US per barrel range). The problem is that there's a surplus of natural gas, and unfortunately the price goes down until supply gets cleared.
"I don't know when a recovery will happen for natural gas but I'm pretty damned sure it's going to happen. The nice thing is, people get scared when the price is going down - that creates opportunities."
First Star
* Northern Star Mining (TSXV:NSM)
* Recent Price: $1.
* 52-Week Range: $0.25-$1.49.
* Snapshot: Northern Star is a mining company that has the 100-per-cent owned Midway property near Val-d'Or, Que., that is part of the Abitibi gold belt.
* President: Michel David.
* Head Office: Val-d'Or, Que.
* Vital Stats: Revenue, $0; Earnings/Loss, $2.7 million loss; Market Cap, $44.2 million; Shares Outstanding, 44.2 million.
* Harris's View: "This company is opening a gold mine in Quebec and hopes to be in production in the next 12 months. We're waiting for a formal reserve assessment. They're hoping to have in the range of 350,000 to 400,000 ounces of gold. With this investment, I'm not playing the gold price. I'm investing in a company that I hope can make money. For a project like this, I'm using a $425 (US per ounce) gold price and I don't think the price is going back to $350.
So we're massively in the money. I think the gold price (recently in the $610 range) can certainly go to $800."
* Harris's Risk Rating: High.
* Web Watch: www.nsmgold.com
Second Star
* PGM Ventures Corp. (TSXV:PPG)
* Recent Price: $1.10.
* 52-week Range: $0.52-$1.36.
* Snapshot: PGM is a mining company whose primary focus is on its 100-per-cent owned Aguas Tenidas zinc/ copper project in Spain.
* CEO: Peter Miller.
* Head Office: Toronto.
* Vital Stats: Current Price/Earnings Ratio, 15.7; Revenue (last 12 mos), $4 million; Earnings (last 12 mos), $1.9 million; Market Cap, $78.6 million; Shares Outstanding, 71.5 million.
* Harris's View: "This company has a zinc mine going into production in Spain and it looks like it will be one of the lowest-cost zinc mines in the world. That's the expectation. Over the next 12 months, we're hoping they can prove up more of a resource. That's the one hangup. We've got a (12-month) target price of $1.50 on this stock. The risk with a project like this is operational, whether they can put it in on time and on budget."
* Harris's Risk Rating: High.
* Web Watch: www.pgm-ventures.com
Third Star
* Gentry Resources (TSX:GNY)
* Recent Price: $4.85.
* 52-Week Range: $4.70-$6.75.
* Snapshot: Gentry is an oil and gas company with a focus on exploration and development of oil and gas properties. Its projects are in four core areas of Alberta.
* CEO: Hugh Ross.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 24.3; Revenue (last 12 mos), $51.7 million; 5-Yr Revenue Growth, 27.7 per cent; Earnings (last 12 mos), $8 million; 5-Yr Earnings Growth, 12.2 per cent; Market Cap, $188.4 million; Shares Outstanding, 38.9 million.
* Harris's View: "This is a natural gas play and it's sort of a core holding. I think it is trading at a discount to its asset value. It is well-financed, it has properties to develop and it has an excellent management team. What I like is that you're buying it through the bottom of the natural gas cycle. We've been adding to our position on weakness. I can't believe it. It's amazing that it now has a $190-million market cap. This company is in production, it has solid cashflow and it has been a very consistent producer over the past 10 years."
* Harris's Risk Rating: Medium.
* Web Watch: www.gentryresources.com
Harris's Edge Record (six picks): +107 per cent. Best Pick: Falcon Oil & Gas (TSXV:FO) +556.1 per cent. Worst Pick: PetroFalcon Corp. (TSX:PFC) -32.3 per cent.
Disclosure: The featured stocks are held in the Terra Resources Flow-Through Funds. Gentry Resources is also held in the Avenue Investment Management portfolio. Harris owns shares in the Terra Resources Fund and the Avenue portfolio.
(This feature is presented for information purposes. Investors are advised to do their own research or consider consulting a registered investment professional before making investment decisions.)






