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

FEATURED PRO: Fred Pynn is vice-president of equities and portfolio manager at Calgary-based Bissett Investment Management. He is a 16-year veteran of the firm (www.franklintempleton.com/bissett).

Fund Form: Pynn manages the Bissett Canadian Equity Fund, which has returned 12.1 per cent in the past 12 months compared to the group average of 17.9 per cent.

Management Expense Ratio: 2.46%.Pynn’s Perspective: “We have a positive outlook on 2004 but expect a lower rate of growth than the current year. Our target for the TSX (index) is 8500 (recently 7993) for the end of 2004. We see continued economic improvement but I think a lot of the easy money has already been made.

Fred Pynn

“The bears are saying that it’s going to be a disaster and the price/earnings ratio of the market is way too high. But it’s normal in a recovery situation to have a higher P/E. We expect that earnings will grow but you’re not necessarily going to see share prices go up as much as earnings. That will bring the P/E multiple gradually back to more reasonable territory.

“With a (U.S.) presidential election in 2004, I don’t think anyone is going to rock the boat too much. We expect that given the strength of the U.S. economy, you’re going to start to see some inflation maybe and therefore the Fed (U.S. Federal Reserve) can’t sit there with one-per-cent interest rates forever. But I think that’s more of a story for 2005.”



FIRST STAR
* Alcan (AL-TSX)
* Recent Price: $58.
* 52-Week Range: $38.77-$55.
* Snapshot: Alcan is one of the world’s leaders in the aluminum and packaging industries and recently increased its clout by acquiring Quebec-based Pechiney.
* CEO: Travis Engen.
* Head Office: Montreal (88,000).
* Vital Stats: Price/Earnings Ratio, 79.4; Revenue (last 12 mo.), $19.2 billion; 5-Yr Revenue Growth, 13.5%; Profit (last 12 mo.), $74 million; Market Cap, $18.66 billion; Shares Outstanding, 321.64 million.
Pynn’s View: “A lot of the metals stocks have had big moves but Alcan hasn’t had as big a move as a lot of them. What’s interesting here is that Alcan produces aluminum and aluminum has been a laggard (compared to other metals) and we believe that will change.
“More importantly, they’re getting close to closing their acquisition of Pechiney, which is expected to be very materially accretive to Alcan’s earnings. Alcan is big, it’s bluechip and it’s sort of a chicken way of playing the economic recovery.”
* Pynn’s Risk Rating: Low.
* Web Watch: www.alcan.com



SECOND STAR
* Alimentation Couche-Tard (ATD.B-TSX)
* Recent Price: $23.35.
* 52-Week Range: $10.38-$23.79.
* Snapshot: Alimentation is a powerhouse in the
convenience store industry, having recently acquired the Circle K Corp. chain of 2,299 stores in the southern U.S. for $830 million US, to bring its total in North America to 4,879. That makes it the fourth-largest convenience store operator in North America.
* CEO: Alain Bouchard.
* Head Office: Laval, Que.
* Vital Stats: Current Price/Earnings Ratio, 28.7; Revenue (last 12 mo.), $3.73 billion; Profit (last 12 mo.), $75.27 million; Market Cap, $1.3 billion; Shares Outstanding, 55.86 million.
Pynn’s View: “Management has been very good and buying things and turning them around and we expect they can do the same with Circle K. Their merchandizing strategies are designed to raise sales and improve margins. This is a higher-risk investment because they borrowed a lot of money to do the deal for Circle K. We think that even though it’s high risk, it’s also high reward.”
* Pynn’s Risk Rating: High.
* Web Watch: www.couche-tard.qc.ca



THIRD STAR
* Speedware Corporation (SPW-TSX)
* Recent Price: $2.65.
* 52-Week Range: $1.21-$2.95.
* Snapshot: Speedware develops and markets application development software and business intelligence software for the mid-range and personal computer markets.
* CEO: Jean-Pierre Theoret.
* Head Office: St. Laurent, Que.
* Vital Stats: Current Price/Earnings ratio, 13.3; Revenue (last 12 mo.), $18.8 million; 5-Yr Revenue Growth, -9.9%; Profit (last 12 mo.), $4.3 million; Market Cap, $78.87 million; Shares Outstanding, 29.76 million.
Pynn’s View: “The financial backing for this company came from the management that was behind Wittke, a very successful Medicine Hat company that made garbage trucks which was taken over by a U.S. company. They’ve fixed up this company and acquired a private software business that has a dominant position in a niche market.
“The company has cash and is looking at further acquisitions. This is a bet on management’s ability to find attractive businesses. This is a high-risk investment because there’s not a whole lot of internal growth.”
* Pynn’s Risk Rating: High.
* Web Watch: www.speedware.com

Pynn’s Edge Record: +18.9%. Best Pick: Alimentation Couche-Tard (in Jan./02) (ATD-B) +87.6%. Worst Pick: Biovail (BVF-TSX) -36.2%.

Disclosure: Pynn may own the Bissett Canadian Equity Fund in which the featured stocks are held.