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

FEATURED PRO: Deb Abbey is the founder, president and portfolio manager of Vancouver-based Real Assets Investment Management. Real Assets is the first investment management company in Canada to focus exclusively on social investing.

Deb Abbey

Website: www.realassets.ca

Fund Form: The Real Assets Social Leaders Fund has returned 6.6 per cent since its inception on September 16, 2003, and the Real Assets Social Impact Balance Fund-Class A has returned 5.4 per cent since its inception on September 16, 2003. Management Expense Ratios: Social Leaders Fund, three per cent; Social Impact Balance, 2.75 per cent.

* Abbey’s Perspective: “I’m optimistic about the equity markets leading up to the U.S. election in November. I think we’ll continue to see the same themes as last year – low interest rates, stimulative government policy and consumer demand that will turn into increased business capital spending. The market is transitioning from a liquidity rally into an earnings-driven rally, and that’s going to drive the TSX up more than 10 per cent in 2004.

“The featured stocks are my top picks among those that trade on North American exchanges, but I also covet a Danish company, Vestas Wind Systems (VWS on the Copenhagen Stock Exchange), which is the world’s largest manufacturer of wind turbines (the stock is held in the Social Leaders fund).”



FIRST STAR
* Zenon Environmental (ZEN-TSX)
* Recent Price: $19.60.
* 52-Week Range: $9.95-$19.99.
* Snapshot: Zenon makes and markets advanced membrane products and services for water filtration systems.
* CEO: Andrew Benedek.
* Head Office: Oakville, Ont. (850 employees).
* Vital Stats: Current Price/Earnings Ratio, 50.2; Revenue (last 12 mo.), $170.0 million; 5-Yr Revenue Growth, 17.0 per cent; Profit (last 12 mo.), $11.3 million; 5-Yr Profit Growth, 13.8 per cent; Market Cap, $423.90 million; Shares Outstanding, 21.63 million.
* Abbey’s View: “In recent years, tragedies in Walkerton (Ont.) and North Battleford (Sask.) have emphasized the need to ensure clean drinking water in a world where water shortages are on the rise worldwide.
“Zenon is well managed and has an effective product that is relatively simple to build and cost effective to operate. Company sales continue to grow at more than 20 per cent a year. The company has a record order backlog and is expanding into the European market.”
* Abbey’s Risk Rating: Medium.
* Web watch: www.zenonenv.com



SECOND STAR
* United Natural Foods (UNFI-Nasdaq)
* Recent Price: $40.91 U.S.
* 52-Week Range: $20.40-$41.43.
* Snapshot: United Natural Foods is a national distributor of natural and organic foods in the U.S. The company carries more than 32,000 natural and organic products and serves more than 14,000 customers, including independently-owned natural products retailers, supernatural chains and conventional supermarkets across the U.S.
* CEO: Steven Townsend.
* Head Office: Dayville, Conn. (3,400 employees).
n Vital Stats (U.S. funds): Current Price/Earnings Ratio, 33.7; Revenue (last 12 mos), $1.5 billion; 5-Yr Revenue Growth, 12.3 per cent; Profit (last 12 mos), $23.0 million; Market Cap, $799.67 million; Shares Outstanding, 19.55 million.
* Abbey’s View: “At the end of its last quarter, the company showed a revenue increase of 23 per cent and a net income increase of 70 per cent (over the year-ago period). The company has just signed a five-year distribution agreement with organic supermarket chain Wild Oats to deliver to 102 retail grocery stores.”
* Abbey’s Risk Rating: Medium.
* Web Watch: www.unfi.com



THIRD STAR
* Canon Inc. (CAJ-NYSE)
* Recent Price: $49.90 U.S.
* 52-Week Range: $33.50-$53.
* Snapshot: Canon manufactures a vast array of technology equipment, including copy machines, printers, cameras, fax machines and word processors.
* CEO: Fujio Mitarai.
* Head Office: Tokyo, Japan.
* Vital Stats (U.S. funds): Current Price/Earnings, 14.9; Revenue (last 12 mos), $27.3 billion; 5-Yr Revenue Growth, 1.0%; Profit (last 12 mos), $2.2 billion; 5-Yr Profit Growth, 19.2%; Market Cap, $43.80 billion; Shares Outstanding, 877.76 million; Dividend Yield, 0.50%.
* Abbey’s View: “Increased sales of digital cameras, semiconductor production equipment and laser printers contributed to an increase in net income of 54 per cent in the nine months ending September 2003. This company is a stellar example of sustainability. Recycling and reuse of toner cartridges has seen the return of over one million cartridges in Canada. The company also collects and recycles rechargeable batteries. As a Business, Canon understands the need
to improve the energy efficiency of its products and manufacturing facilities.”
* Abbey’s Risk Rating: Medium.
* Web Watch: www.canon.com

Disclosure: Zenon Environment is held in both the Social Leaders and Social Impact Balanced funds and
United Natural Foods and Canon are held in the Social Leaders fund. Abbey personally owns the funds in which the featured stocks are held.