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

FEATURED PRO: Peter Linder is the Calgary-based energy strategist with DeltaOne Capital Partners (www.deltaonecapital.com).

Linder manages the DeltaOne Energy Fund. DeltaOne is a privately held asset management firm with offices in Calgary and Toronto, managing hedge funds targeting the energy sector.

Fund form: The DeltaOne Energy Fund has a return of approximately 70% since its inception in October/2002. Management Expense Ratio (MER): 2.0%.

Linder’s Perspective: “Our fund currently emphasizes a lot of mid-cap producers such as Cequel Energy (CQL-TSX), Ketch Resources (KER-TSX) and Thunder Energy (THY-TSX), so now I’ve moved down in market size to focus more on smaller guys (companies) because I think there’s more upside there. The larger companies have less ability to double their production compared to the smaller guys and the smaller guys tend to get ignored.

“I think as the U.S. economy recovers, I see a greater demand and better prices for natural gas. The price should stabilize next year. I would say $5.50, maybe as high as $6. But I think both natural gas (weighted) and oil (weighted) stocks look very attractive.”

Commodities Outlook: Linder forecasts 2004 average prices of $30 US per barrel for oil and $5.50 US NYMEX for natural gas.



FIRST STAR
* Case Resources (CAZ-TSX)
* Recent Price: $1.24.
* 52-Week Range: .65-$1.30
* Linder’s 12-Month Target: $1.75.
* Snapshot: Case is a junior oil and gas company whose Western Canadian assets have recorded growth from 322 boe/day in 2001 to 1,692 boe/day in the fourth quarter of 2002.
* CEO: Jeffery Tonken.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 13.2; Revenue (last 12 mos), $18.1 million; Net Earnings (last 12 mos), $5.4 million; Market Cap, $74.4 million; Shares Outstanding, 60.0 million.
* Linder’s View: “This company is about 90% weighted toward light oil and it has excellent, low-risk development projects. I foresee production rising about 50% next year over this year’s production. It’s a well-managed company and a likely takeover candidate.”
* Linder’s Risk Rating: Low (relative to the energy sector).
* Web watch: www.case.ca



SECOND STAR
* Brooklyn Resources (BN-TSX)
* Recent Price: $2.32.
* 52-Week Range: $1.01-$2.40.
* Linder’s 12-Month Target: $3.
* Snapshot: Brooklyn recently bolstered production by acquiring a property at Ferrier in west-central Alberta. Its other main assets are at Medicine Lodge.
* CEO: Bob Rosine.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 14.1; Revenue (last 12 mos), $3.4 million; Net Earnings (last 12 mos), $2.6 million; Market Cap, $61.79 million; Shares Outstanding, 26.63 million.
* Linder’s View: “This is a strong exploration team that was formerly the management team at Maxx Petroleum. They have an excellent mix of low-risk and high-risk, high-impact drilling opportunities and production is weighted about 70% towards natural gas.
“I’m looking for cash flow per share of 50 cents next year. With reasonable success, this stock will be over $3 a year from now.”
* Linder’s Risk Rating: Low.
* Web watch: www.brooklynenergy.ca



THIRD STAR
* Winstar Resources (WRL-X-TSX V)
* Recent Price: $1.15.
* 52-Week Range: .23-$1.25.
* Linder’s 12-Month Target: $2.
* Snapshot: Winstar is a junior oil and gas company with properties based in Alberta and Saskatchewan.
* CEO: David Monachello.
* Head Office: Calgary.
* Vital Stats: Revenue (last 12 mos), $1.7 million; Net Earnings/Loss (last 12 mos), $700,000 Loss; Market Cap, $35.08 million; Shares Outstanding, 30.5 million.
* Linder’s View: “I like the management. There are three senior guys running this company with combined experience of about 100 years.
“The company has been drilling very successfully recently and they have a major farm-in opportunity with a senior producer where they’re committed to spending $10.5 million. I’m looking for cash flow per share next year of about 35 cents.”
* Linder’s Risk Rating: Low.
* Linder’s Edge Record: +4.7%. Best Pick: Cequel Energy (CQL-TSX) +48.9%. Worst Pick: Gauntlet Energy (GAU-TSX) -97.7%.
* Disclosure: The featured stocks are held in the DeltaOne Energy Fund. Linder is restricted from personally trading shares within the DeltaOne Energy Fund in which the featured stocks are held.