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

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Fred Pynn is senior vice-president and portfolio manager of Calgary-based Bissett Investment Management (www.franklintempleton.ca/bissett. The graduate of the University of Calgary joined Bissett in 1987 and earned his chartered financial analyst designation in 1989.

The featured stocks are among the top 10 holdings in the Bissett Canadian Small Cap Fund, which was up 21.6 per cent for the year ending Feb. 28 (its first full year since inception). The group average for that period was 8.7 per cent.

Pynn’s Outlook: “At this stage of the game, as we go forward, we’ve already priced in a lot of the good news (into stocks). Now that the market has gone up, with people expecting the economy to be better and corporate earnings to be better, what could happen is maybe the economy won’t be as good as people think. I still think the economy will improve and I still think the market will be higher by year end than it is right now, but, between now and then, there could be some pullbacks. We’re fully invested, but, with stocks having moved up so much since Sept. 11, it’s not like we’re falling all over cheap stocks.”



FIRST STAR

* Gildan Activewear (GIL.A-TSE)

* Recent Price: $27.50.

* 12-Month Range: $16.25-$28.43.

* Snapshot: If you check the tag on your T-shirt, chances are it’s a Gildan, the company that manufactures and markets activewear such as T-shirts, golf shirts and sweatshirts to wholesale distributors.

* CEO: H. Greg Chamandy.

* Head Office: Ville St-Laurent, Que. (7,000 employees).

* Vital Stats: Revenue (last 12 mos), $509.1 million; Profit/Loss (last 12 mos), $1.2 million loss; Market Cap, $319.5 million; Shares Outstanding, 22.2 million.

* Pynn’s Comment: “Gildan is one of the dominant producers of T-shirts in North America. They have very low costs and the business should get easier going forward because one of their main competitors was Fruit of the Loom, which is in bankruptcy and has been bought by Warren Buffett (Berkshire Hathaway). Fruit of the Loom is going to exit the activewear industry and stop making T-shirts, so that’s going to make the competitive environment a lot easier. The stock has already started to move up but we see a lot more potential.”

* Pynn’s Risk Rating: Medium.

* Web watch: www.gildan.com

SECOND STAR



* Kingsway Financial Services (KFS-TSE)

* Recent Price: $15.96.

* 12-Month Range: $10.60-$20.60.

* Snapshot: Property and casualty insurance company Kingsway offers non-standard auto insurance, which is a polite way of saying they’ll cover the Duke boys and your Aunt Bea. Kingsway also offers other specialty products through its wholly owned North American insurance subsidiaries.

* CEO: William Star.

* Head Office: Mississauga, Ont. (1,000 employees).

* Vital Stats: Price/Earnings Ratio, 33.2; Revenue (last 12 mos), $805.7 million; 5-Yr Revenue Growth, 47.5%; Profit (last 12 mos), $42.3 million; 5-Yr Profit Growth, 2.0%; Market Cap, $492.0 million; Shares Outstanding, 48.7 million.

* Pynn’s Comment: “Their main specialty is insuring non-standard automobile insurance so, if you’ve had 14 traffic accidents, Kingsway is basically the only company that will insure you. Basically, they get to charge whatever they want. Over the years, they’ve implemented a pretty focused acquisition strategy, buying other niche insurers. They’re growing both internally and by way of acquisition. They’re now trading around $16 because they recently had a quarter where they came in (with financials) below what people expected.”

* Pynn’s Risk Rating: Medium.

* Web watch: www.kingsway-financial.com

SECOND STAR

* GTC Transcontinental Group (GRT.A-TSE)

* Recent Price: $35.25.

* 12-Month Range: $18.12-$35.56.

* Snapshot: Somebody’s got to fill those magazine racks and, if you’re looking for a big Canadian player, look no Further than GTC, the commercial printer and publisher of household names such as Elle and The Hockey News. The company also has stakes in weekly newspapers, interactive marketing and Internet solutions.

* CEO: Remi Marcoux.

* Head Office: Montreal (10,367 employees).

* Vital Stats: Price/Earnings Ratio, 67.3; Revenue (last 12 mos), $1.8 billion; 5-Yr Revenue Growth, 12.8%; Profit (last 12 months), $20.7 million; 5-Yr Profit Growth, 44.3%; Market Cap, $1.1 billion; Shares Outstanding, 28.3 million; Dividend Yield, 0.6%.

* Pynn’s Comment: “The stock has been moving up quite strongly, but they have excellent earnings, they just raised the dividend and the company continues to trade at quite a very favourable valuation. We think that as the economy continues to grow, it will feed right into their business because of increased advertising.”

* Pynn’s Risk Rating: Medium.

* Web watch: www.transcontinental-gtc.com

* Pynn’s Record (with Oct. 24/Jan. 24 picks): +30% (CAE +52%, Saputo +45%, Alimentation Couche Tard +37%, CNR +27%, Magna International +17%, Power Financial -1%.

* Disclosure: Pynn does not directly own any of the stocks. He may hold them in Bissett funds.