(Gyle Konotopetz regularly profiles the top three stock picks of some of Canada’s most accomplished investment pros).

Danny Deadlock

FEATURED PRO: Danny Deadlock is an independent equity analyst based in Hanna. He publishes the online Microcap (www.microcap.com) newsletter that features smaller companies on North American exchanges.

Deadlock’s Perspective: “So far, 2004 is proving to be a very tough challenge for small-cap investors as mining has taken a beating, techs are stinging from another Nortel fiasco and the small-cap oil and gas sector is stuck in neutral during a time oil is hitting 14-year highs. As a result, knowing where to invest without incurring a ton of risk has become a real challenge.

“At this stage, we’re only two months away from summer and investors will want to be very cautious of what they’re buying as the July-August period can be terribly boring. Small-cap and microcap investors should be thinking about capital preservation for the next few months and forgetting about double- or triple-digit returns.

“Areas we particularly like are oil and gas, well-capitalized mining stocks that have lost almost half their value this year and companies with a solid business model in China or India.”



FIRST STAR
* Technology Solutions (TSCC-Nasdaq)
* Recent Price: $.99 US.
* 52-Week Range:$0.91-$1.80.
* Snapshot: Technology Solutions provides a broad range of services, including project planning, software selection, re-engineering implementation, systems integration, upgrades, training and outsourcing.
* CEO: Michael Gorsage.
* Head Office: Chicago.
* Vital Stats (U.S. dollars): Revenue (last 12 mos), $45.6 million; 5-Yr Revenue Growth, –22.2 per cent; Earnings/Loss (last 12 mos), $29.5 million Loss; Market Cap, $40.20 million; Shares Outstanding, 40.61 million.
* Deadlock’s View: “This company should end the fourth quarter of 2004 with approximately $35 million US in net cash (about 85 cents per share). It is close to break-even status on annual revenue of approximately $30 million, yet the market cap beyond cash value is only $6 million. That’s very small for a company that has worked with more than 800 international corporations.”
* Deadlock’s Risk Rating: High (based on dependence on U.S. economy and corporate spending on technology).
* Web Watch: www.techsol.com



SECOND STAR
* Telecom Communications (TCOM-U.S. OTC:BB)
* Recent Price: .50 US.
* 52-Week Range: $0.28-$2.64.
* Snapshot: Telecom is a company that targets users of mobile devices such as mobile phones, Internet and PDAs (personal digital assistants), and has been working with Chinese companies in developing telecommunication value-added service application software and system integration for commercial, industrial, cultural and education usage.
* CEO: Fred Deng.
* Head Office: Hong Kong.
* Vital Stats: Financial numbers not available for Over The Counter Bulletin Board companies.
* Deadlock’s View: “This is a pure play on China and its explosive growth of cellphone usage and text messaging. The managers of the company have spent their lives doing business in China and have operated their current business since 1991. The company went public just over a year ago through a reverse takeover on the OTC exchange to tap into North American capital and has very aggressive plans for growth. The company already has six million registered users of its text-messaging services and recently was awarded a contract by a large Chinese insurance company to manage three million more clients.”
* Deadlock’s Risk Rating: High (based on inherent risks of doing business in China).
* Web Watch: www.telecom-communications.com



THIRD STAR
* Global Link Data Solutions (GLK-TSXV)
* Recent Price: .46.
* 52-Week Range: .07-.75.
* Snapshot: Global Link specializes in the integration of wireless technology with current satellite technology to bring high- speed connectivity solutions to remote users in Western Canada. The company has three broad product categories – wireless communications, gas detection and data management.
* CEO: Derek Begin.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 15.3; Revenue (last 12 mos), $6.4 million; 5-Yr Revenue Growth, -1.3 per cent; Earnings (last 12 mos), $500,000; Market Cap, $4.93 million; Shares Outstanding, 10.7 million.
* Deadlock’s View: “Global Link has seen tremendous growth over the past year and we expect this to continue for the foreseeable future. The application of wireless technology to the oil and gas industry presents numerous opportunities because cash flow is generated in the field and this is one of the first areas corporations will focus capital expenditures. At the same time, they will will look for ways to cut operating costs. Well locations are remote, so companies will become dependent upon wireless applications – not only for production reporting but for safety.”
* Deadlock’s Risk Rating: High (based on dependence on oil and gas industry and potential impact from a slowdown in capital spending).
* Web Watch: www.global-link.com

Deadlock’s EDGE Record: +48.9 per cent. Best Pick: Marimba (MRBA-Nasdaq) +390.3 per cent. Worst Pick: International Utility Structures (IUS-TSX) -77.8 per cent.

Disclosure: Deadlocks says he owns small positions in the featured stocks.