On the phone line from Vancouver, there is momentary silence, then a terrible racket – perhaps the sound of frantic tapping on a keyboard by a fund manager searching for an unloved, orphaned friend on the Toronto Stock Exchange?

“Mmmmmmmmmmmmmmmmm, let’s see now, ta-ta-ta-ta-ta, mmmm,” says Wayne Deans.

The fund manager at Deans Knight Capital Management groans. He sighs. He groans. He sighs. He hums. He haws.

“Mmmmmm,” continues Deans, “OH, HERE’S ONE!!! YEAH!!! How ’bout this little puppy that’s just sittin’ doin’ nothin’. You haven’t heard of it? Good. I guess that’s why I like it so much.”

I’ve never met Wayne Deans, but I think I’ve got him pegged. He’s probably not the most stylish guy in the biz, avoids packs of money managers and analysts and marches to the beat of his own drummer.

I figure he drives a beater to work, sports a grey snap-brimmed fedora, a grey pinstriped suit and Columbo’s wrinkled, coffee-stained trenchcoat and drives folks crazy tapping his forehead and guffawing while beating the bushes for a diamond in the rough.

While the stylish herd on Bay Street generally pump stocks with brand names like BCE (BCE-TSE), TD (TD-TSE) and Loblaws (L-TSE), the Deans Knight sleuth beats the living daylights out of the street with names you’ve never heard of.

Sorry, you won’t find any of those sultry wireless jobs in the Northwest Specialty Equity Fund that Deans manages.

The top holding in the fund is something called LionOre Mining, LIM-TSE (9.1%). A nickel mine? You’ve got to be kidding!

Wait a minute, this baby’s up 52 per cent in the three months since Deans made it his top pick in the Edge’s Pro’s 3 Stars column.

Deans’ current roster boasts about as many household names as the Belarus hockey team.

And, like that outfit, it also overachieves like mad.

“We specialize in companies you haven’t heard of that are good, solid business franchises,” quips Deans, drawing on 28 years’ experience as a professional investor in Canada.

“And if it’s a stock that isn’t widely covered (by analysts), it’s over-priced or under-priced.”

The Northwest Fund has appreciated 28.75 per cent in 12 months (through Jan. 31) in a killer bear market and is on Globe Fund’s (www.globefund.com) select group of five-star funds.

Deans’ unheralded lineup of mostly small caps has skunked the so-called smart money. The Canadian small-cap average for the past year has gained 1.66 per cent and the Nesbitt Burns Canadian Small Cap Index has performed only slightly better at 2.73 per cent.

Rounding out Deans’ top five holdings after LionOre are a diamond miner (Aber Diamonds, ABZ-TSE, up 43 per cent in the past year), a maker of cool motor valves (Velan, VLN-TSE, up 21 per cent in the past year), a manufacturer of snazzy apple-sauce jars (Winpak, WPK-TSE, up 67 per cent in the past year) and a door manufacturer (Masonite International, MHM-TSE, up a whopping 186 per cent).

Ask Deans to explain how he turns apple sauce into apple pie and he’ll joke that he doesn’t have anything to do with it. Investors did all the work, he’ll say. Deans’ biggest winner in 2001 was Calgary-based Forzani Group (FGL-TSE), which was virtually ignored by Bay Street before it surged 275 per cent for the year. Now, the street’s all over it like a dirty shirt.

Deans’ picks for the Edge only three months ago have soared a phenomenal 43 per cent. One of those picks was Calgary-based large-cap Talisman Energy (TLM-TSE, up nine per cent since December).

Why Talisman, a giant on a team of midgets?

It’s the oil and gas stock investors love to hate because of its controversial Sudan operations and, for that reason, Deans believes its a bargain.

Unlike most of his peers, Deans’ pulse doesn’t go up and down with the market’s swings.

“We don’t track the overall market,” says Deans after unearthing three no-name specials for this week’s edition of Pro’s 3 Stars (above). “For years during the tech boom, the market was way up and we weren’t up and now the market is down and we’re way up. So you might call us stock pickers rather than market players.”

* PRECIOUS FUND: A scan of Canada’s top mutual funds shows precious metals funds head and shoulders above the pack over the past year.

Mackenzie Financial Universal Precious Metals Fund leads the charge with a 12-month rise of 65 per cent. Its top three holdings are Repadre Capital (RPD-TSE), Gabriel Resources (GBU-TSE) and Compania Minas Buenaventura (BVN-NYSE).

* SAGE ADVICE: “Beware of a stock that is given an abundance of publicity.”

- Finance author Frank J. Williams.



HOT ALBERTA STOCK: Heritage Oil Corp.

HOC.A-TSE $2.00

Up 70 cents (+53.8%) on 215,900 shares (for week ending March 1).

For junior oilpatch players, the magic word is cash and, to that end, Heritage Oil hit paydirt with an injection of U.S. dollars that precipitated a frenzy of buying activity. The Calgary-based company announced it has entered into an option agreement under which it will receive a $7-million US advance in a deal in which the financing party has the right to interests in the Republic of Congo. Heritage also has operations in Oman, Angola, Uganda and India.



COLD ALBERTA STOCK: Gimbel Vision International.

GBV-CDNX .05

Down 3 cents (-37.5%) on 40,300 shares (for week ending March 1).

Please do not adjust your glasses! Gimbel, a $2.40 stock less than three years ago, is, in fact, trading at a nickel. Just a week after the stock was suspended from trading on the TSE and moved to the CDNX, more bad news. The Calgary-based vision-correction company said it has failed to meet certain provisions of certain agreements, including a management agreement with Dr. Howard Gimbel, and is continuing to negotiate with Dr. Gimbel.