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

FEATURED PRO: Kirby Thibeault is president of Calgary-based Kapital Investments Corp. (www.kapital-investments.com) and a market strategist who distributes an interactive financial markets commentary that strives to give subscribers a three- to six-month lead on expected behaviour in the markets. Thibeault has a master’s degree in financial economics and is a former stock broker.

Thibeault’s Perspective: “First, I’m expecting more stability to come into the market in 2004, meaning less volatility and price swings. Second, I’m expecting a tightening in the U.S. Federal funds (interest) rate. Third, I expect a pickup in venture capital financings and more initial public offerings later in the year. Fourth, I expect the bond market to have a difficult time as interest rates creep up or are expected to creep up. Fifth, I think the market in mid- to later next year will become more discerning in terms of where investment capital gets allocated.

“I continue to like technology because earnings growth is going to attract the highest growth in investment spending, but one area I am negative on is the gold sector.”



FIRST STAR
* Peyto Energy Trust (PEY.UN-TSX)
* Recent Price: $26.95.
* 52-Week Range: $10.08-$27.50.
* Snapshot: Peyto is an oil and gas income trust that develops and produces natural gas in Alberta’s central deep basin.
* CEO: Don Gray.
* Head Office: Calgary.
* Vital Stats: Monthly distribution, .15 per trust unit; Current Price/Earnings ratio, 22.6; Revenue (last 12 mos), $147.89 million; Profit (last 12 mos), $52.56 million; Market Cap, $1.22 billion; Shares Outstanding, 45.40 million.
* Thibeault’s View: “This company has good management. Don Gray is a young guy who is very aggressively growth driven. He has taken the stock from less than $1 a share to over $26. The company’s reserve life is close to 11 years now, which is quite a lot higher than the industry norm.
“The company has grown principally through the drill bit. It hasn’t purchased a lot of over-priced, high-cost production. Don has utilized his capital structure very well and in my mind that has translated into a fairly stable stock price.”
* Thibeault’s Risk Rating: Low-to-Medium.
* Web Watch: www.peyto.com

SECOND STAR
* Alvarion (ALVR-Nasdaq)
* Recent Price: $10.69 US
* 52-Week Range: $1.82-$11.45.
* Snapshot: Alvarion delivers broadband wireless networking infrastructure to telecom carriers, Internet service providers and private network operators around the globe.
* CEO: Zvi Slominsky.
* Head Office: Tel Aviv, Israel (571 employees).
* Vital Stats (US dollars): Revenue (last 12 mos), $110 million; Profit/Loss (last 12 mo.), $17.3 million loss; Market Cap, $550.87 million; Shares Outstanding, 51.53 million.
* Thibeault’s View: “The wireless sector, to my mind, is a natural strong growth sector for the next 18 to 36 months. In my mind, a high percentage of investment spending will continue to go into that sector. The speculators will continue to invest large sums of capital into that sector because of the high growth expectations. I think that will take this stock to around $16 (US) on or before the next 18 months. This company is well managed and has a fairly good balance sheet.”
* Thibeault’s Risk Rating: Medium.
* Web Watch: www.alvarion.com

THIRD STAR
* Citigroup Inc. (C-NYSE)
* Recent Price: $47.57 US
* 52-Week Range: $30.25-$49.15.
* Snapshot: Citigroup is a global financial services company with about 200 million customers in more than 100 countries. Services include consumer banking and credit, corporate and investment banking, insurance, securities brokerage and asset management.
* CEO: Sanford Weill.
* Head Office: New York (250,000 employees).
* Vital Stats (US dollars): Current Price/Earnings Ratio, 15.8; Revenue (last 12 mo.), $93.2 billion; 5-Yr Revenue Growth, 6.8%; Profit (last 12 mos), $15.5 billion; 5-Yr Profit Growth, 18.4%; Market Cap, $245.40 billion; Shares Outstanding, 5.16 billion; Dividend Yield, 3%.
* Thibeault’s View: “This company has a good balance sheet with a good mix between debt and equity. This is a very diverse, stable company and I expect a nice lift in their revenue and bottom line to come from the improvement in the financial markets. I also expect the investment banking arm to start to increase significantly in terms of a larger number of equity financings.
“I think it’s reasonable to suggest a price range of $55 to $57 (US).”
* Thibeault’s Risk Rating: Low.
* Web Watch: www.citigroup.com
Disclosure: Thibeault says he does not personally hold positions in the featured stocks, all of which are covered in the Kapital Investments newsletter.