(Every week, Business Edge columnist Gyle Konotopetz profiles the top three stock picks of one of Canada’s top investment pros.)

FEATURED PRO: Garey Aitken is vice-president and director of equity research with Calgary-based Bissett Investment Management (www.franklintempleton.com).

Fund Form (based on 12-month performance): Bissett Canadian Equity Fund, -13.3% versus a group average of -11.9%; Bissett Canadian Large Cap Fund, -13.4 versus a group average of -12.7%; Bissett Canadian Microcap Fund, -0.7% versus a group average of -13.4%; Bissett Canadian Small Cap Fund, -8.3% versus a group average of -13.4%.

Aitken’s Perspective: “We’ve had a great move in the market in the past three to three-and-a-half months and I think we’re really at an inflection point here entering earnings season again. I think people have to watch the earnings and see if we indeed finally get a turnaround in these economies. I think we certainly need an earnings recovery, certainly for an increase in stock prices from here. I don’t think we can expect any more general
market appreciation unless we can get some help from
growing earnings because the valuations are pretty fair to full.

“We’re very much individual stock pickers and at any point in time, our portfolios can look a fair bit different from the market as a whole.”

FIRST STAR
* Nexen Inc. (NXY-TSX)
* Recent Price: $35.15
* 52-Week Range: $28.26-$42.18.
* Snapshot: Nexen is a world beater in the energy industry, boasting operations in North America, South America, the North Sea, Yemen, Nigeria, Australia and southeastern Asia. It also is a major player in the Alberta oilsands and supplies bleaching agents to the pulp and paper industry.
* CEO: Charlie Fischer.
* Head Office: Calgary (2,769 employees).
* Vital Stats: Current Price/Earnings Ratio, 7.0; Revenue (last 12 mos), $3.6 billion; 5-Yr Revenue Growth, 17.2%; Profit (last 12 mos), $641 million; Market Cap, $4.18 billion; Shares Outstanding, $123.3 million; Dividend Yield, 0.884%.
* Aitken’s View: “The stock hasn’t performed that well because natural gas has been the preferred commodity of investors and Nexen is about 80 per cent weighted towards oil. The
perceived political risk is also quite high right now in light of what’s developed in the Middle East in the last year or so.
“However, we don’t think the political risk is a significant risk to
the story, and we think the company can continue to grow longer term at a rate of 5-10 per cent a year in terms of production per share.”
* Aitken’s Risk Rating: Medium.
* Web watch: www.nexeninc.com' target='_new'>www.nexeninc.com

SECOND STAR
* Dorel Industries (DII.B-TSX)
* Recent Price: $38.35
* 52-Week Range: $31.40-$43.99.
* Snapshot: Dorel has the furniture market cornered with its products sold in 60 countries. The company manufactures ready-to-assemble furniture, juvenile furniture and accessories and home furnishings.
* CEO: Martin Schwartz.
* Head Office: Westmount, Que. (3,600 employees).
* Vital Stats: Current Price/Earnings Ratio, 12.5; Revenue (last 12 mos), $1.6 billion; 5-Yr Revenue Growth, 21.0%; Profit (last 12 mos), $99.8 million; 5-Yr Profit Growth, 19.8%; Market Cap, $1.05 billion; Shares Outstanding, 26.85 million.
* Aitken’s View: “This is an example of a Canadian-based company that is really a leader in its marketplace, selling a lot through some of the bigger retailers throughout North America. We also like the geographic growth, particularly the fact that they have a presence in Europe through an acquisition they made this year.
“It’s really not a household name but they’re certainly well-capitalized, profitable, growing and we’re comfortable with the valuation. This is one of those long-term quality growth stories.”
* Aitken’s Risk Rating: Medium.
* Web watch: www.dorel.com

THIRD STAR
* Kingsway Financial Services (KFS-TSX)
* Recent Price: $18.60
* 52-Week Range: $9.50-$18.60
* Snapshot: Kingsway operates in a niche market of auto insurance in North America, covering drivers who fail to meet the criteria of standard insurers.
* CEO: Bill Star.
* Head Office: Mississauga, Ont. (1,680 employees).
* Vital Stats: Current Price/Earnings Ratio, 9.4; Revenue (last 12 mos), $2.1 billion; 5-Yr Revenue Growth, 46.5%; Profit (last 12 mos), $87.7 million; 5-Yr Profit Growth, 18.8%; Market Cap, $826.96 million; Shares Outstanding, 48.93 million.
* Aitken’s View: “As a non-standard auto insurer, this company is clearly a beneficiary of general increases in insurance premiums so we see major growth here and we expect that growth to continue through ’03 and into ’04. We’re looking at a single-digit price/earnings multiple here for ’03 earnings.”
* Aitken’s Risk Rating: Medium.
* Web watch: www.kingsway-financial.com
n Aitken’s Edge Record: +19.2%. Best Pick: Kingsway Financial (KFS-TSX) +46.5%; Worst Pick: Gildan Activewear (GIL.A-TSX) +4.9%.
* Disclosure: Aitken says he indirectly owns the featured stocks through the Bissett Funds.