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

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Wayne Deans, partner and portfolio manager of Vancouver-based Deans Knight Capital Management. Deans was the 1996 Analyst Choice Awards Mutual Fund Manager of the Year. Deans Knight serves private clients, mutual fund clients and is also in the pension and endowment business.

Deans’ Current Strategy: “Regardless of the market, our strategy remains the same. We’re looking for smaller, faster-growing companies, companies with market valuations of less than $1 billion that we can buy at prudent prices. And this is our kind of market, which it has been over a year now. This is a stock-picker’s market. We’ve come through two or three years where any bonehead trader could look like a hero for a while until he blew up. All you had to do was buy the market. Now, it’s more normal conditions and you have to buy businesses at prudent prices.”

First Star
* LionOre International Mining (LIM-TSE).
* Recent Price: $2.22.
* Year Range: 0.90-$2.55.
* Snapshot: LionOre is an international mining company focused on the nickel industry and is planning to develop a major gold project in Australia next year.
* CEO: Colin Steyn.
* Head office: Toronto (120 employees).
* Vital Stats: Current Price/Earnings Ratio, no earnings; Revenue (last 12 mos), $14.8 million; Loss (last 12 mos), $11.8 million; Market Cap, $263.19 million; Shares Outstanding, 119.63 million.
* Deans’ Comment: “It’s one of the very pure plays on nickel. Three things we like are: one, they’re a low-cost producer with an average cost of production of about $1.40 a pound, which puts them at the low end of the world’s nickel producers; two, their production is growing and their production will go from about 2,500 tonnes of nickel in 2001 to a run rate of almost 10,000 tonnes by the end of next, so they’ll almost quadruple their production; three, in our opinion, they’ve got the strongest senior management team of any mining company we’ve looked at. They also have a gold discovery in Western Australia and it’s a very robust discovery.”
* Web watch: www.lionore.com

Second Star
* Talisman Energy (TLM-TSE)
* Recent Price: $55.50.
* Year Range: $46.51-$65.77.
* Snapshot: Talisman is an independent oil and gas producer with operations in Canada, the North Sea, Sudan and Indonesia. It also is conducting exploration in Algeria and Trinidad.
* CEO: Jim Buckee.
* Head Office: Calgary (1,263 employees).
* Vital Stats: Price/Earnings Ratio, 7.7; Revenue (last 12 mos), $5.8 billion; 5-Yr Revenue Growth, 37%; Earnings (last 12 mos), $1.1 billion; Market Cap, $7.44 billion; Shares Outstanding, 134.13 million; Dividend Yield, 1.1%.
* Deans’ Comment: “Normally, we concentrate on small companies, but there’s a big oil company in Calgary that we think is seriously under-valued. It is Canada’s largest independent exploration and production company, it has great reserves, it has great steady growing production, it has a very high-quality management group and it is being penalized by its investment in Sudan. That is a problem that can be solved, either by a change of perception within the world community about Sudan being good or bad, or by liquidating the asset.”
* Web watch:www.talisman-energy.com

Third Star
* Cinram International (CRW-TSE)
* Recent Price: $4.20.
* Year Range: $2-$4.75.
* Snapshot: Cinram is an independent manufacturer of pre-recorded multimedia products with locations in Canada, the U.S., Europe and Latin American.
* CEO: Isidore Philosophe.
* Head Office: Scarborough, Ont. (3,000 employees).
* Vital Stats: Revenue (last 12 mos), $763.2 million; 5-Yr Revenue Growth, 15.9%; Loss (last 12 mos), $33.5 million; Market Cap, $233.92 million; Shares Outstanding, 55.04 million.
* Deans’ Comment: “It’s one of North America’s four or five largest producers of pre-recorded audio and video DVDs and VHSs. It was a high flyer until about three years ago, but competition has intensified, margins are narrower and you’ve got the threat of downloading of video and music. The business is not going to go away, the margins will improve as they drive some of the weaker players out of the industry. I can buy this thing at two times cash flow and below book value.”
* Web watch: www.cinram.com

* Disclosure: Deans says he personally holds positions in some of the stocks he recommends.