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

FEATURED PRO: Mark Stevens is president of Watermark Capital Management (www.watermark.ca). Watermark is a Vancouver-based investment management firm that focuses on value investing.

The featured stocks are held in the Watermark Value Fund, which has a compounded annual rate of return of 3.4 per cent since its inception in September 2000.

Stevens’ Perspective: “I think one has to be cautious in this market. The situation in Iraq is obviously creating a lot of uncertainty in the market. There are some signs that earnings are doing a little better so I’m cautiously optimistic.”



FIRST STAR
* Quebecor (QBR.A-TSX)
* Recent Price: $17.50.
* 52-Week Range: $11.60-$25.05.
* Snapshot: Quebecor has its footprint on the globe. It operates the world’s largest commercial printer through its subsidiary, Quebecor World. Its other main entity is media giant Quebecor Media, which owns the Calgary Sun and the Edmonton Sun.
* CEO: Pierre Karl Peladeau.
* Head Office: Montreal (58,000 employees).
* Vital Stats: Current Price/Earnings Ratio, 12.3; Revenue (last 12 mos), $11.9 billion; 5-Yr Revenue Growth, 11.4%; Profit/Loss (last 12 mos), $97.4 million loss; Market Cap, $404.67 million; Shares Outstanding, 23.12 million.
* Stevens’ View: “Quebecor trades for about the price of the market value of its investment in Quebecor World. So you essentially get their interest in Quebecor Media free. There have been concerns about the company’s ability to meet its debt but they’ve recently successfully refinanced their debt. They now have a favourable debt amortization schedule going forward.”
* Web watch: www.quebecor.com



SECOND STAR
* Premium Brands (FFF-TSX)
* Recent Price: $8.99.
* 52-Week Range: $7-$14.70.
n Snapshot: Premium Brands puts food on the table,
manufacturing and marketing consumer foods in Canada and the western U.S. through several brand names, including Fletcher’s, Grimm’s and McSweeney’s.
* CEO: Fred Knoedler.
* Head Office: Richmond, B.C.
* Vital Stats: Revenue (last 12 mos), $265.6 million; 5-Yr Revenue Growth, -5.5%; Profit/Loss (last 12 mos),
$5.3 million loss; Market Cap, $92.66 million; Shares Outstanding, 10.31 million.
* Stevens’ View: “This company has had a lot going on in the last two years in the way of restructuring and selling of non-core assets, and that process has been more or less completed. I think going forward the picture looks a lot clearer now. They trade at a discount to book value although there is some goodwill on their books. I expect their earnings to be reasonable going forward and I think in the long term they’re likely to be acquired by somebody.”



THIRD STAR
* Geac Computer (GAC-TSX)
* Recent Price: $4.20.
* 52-Week Range: $2.60-$7.60.
* Snapshot: Geac is a big-time player in the IT industry, providing software and systems solutions to corporations around the globe. Geac is in the process of completing its acquisition late last year of software solutions company Extensity (EXTN-Nasdaq).
* CEO: Paul Birch.
* Head Office: Markham Ont. (3,500 employees).
* Vital Stats: Current Price/Earnings Ratio, 8.2; Revenue (last 12 mos), $671.9 million; 5-Yr Revenue Growth, 2.7%; Profit (last 12 mos), $43.8 million; Market Cap, $349.38 million; Shares Outstanding, 831.8 million.
* Stevens’ View: “I think their business restructuring is complete. The closing of their acquisition of Extensity (EXTN-Nasdaq) has taken longer than expected
because of U.S. regulatory requirements. But it looks on track and I would expect that will close some time in March. In the meantime, the stock has just been marking time. I think the story still looks good. The question has been how Geac will grow its sales rather than have them decline. I think acquisitions like that of Extensity should be the answer to that question.”
* Web watch: www.geac.com
* Stevens’ Edge Record: – 2.6%. Best Pick: Hudson Bay Co. (HBC-TSX) +23.5%; Worst Pick: Fairfax Financial (FFH-TSX) -21.3%.
* Disclosure: Stevens says he personally holds a position in Geac Computer and also owns shares in the Watermark Value Fund in which the stocks are held.