(Business Edge columnist Gyle Konotopetz regularly profiles the top three stock picks of some of Canada's most accomplished investment pros.)

FEATURED PRO: Fred Pynn is vice-president of Bissett Investment Management (www.franklintempelton.com/bissett). Pynn manages the Bissett Canadian Equity Fund.

Fund Form: The Bissett Equity 'A' Fund has a three-year return of 6.3 per cent compared to the group average of 6.4 per cent.

Management Expense Ratio (MER): 2.68 per cent.

Fred Pynn

Pynn's Perspective: "We've had a good run in the stock market, especially in the last quarter of last year. The bottom line is that there are not a lot of opportunities that stand out and tell you to buy a stock. If the price of oil spikes up or something wacky happens in the Middle East, that can trigger a lot of volatility. A lot of this strength in the market is being driven by the fact that interest rates continue to drop.

"We think the economy is going to be a little bit slower in 2005 and we also see a slowdown in corporate growth. We think corporate profits are going to be up, but not as much as they have been over the last couple years. Overall, it's a tough environment."

First Star

* Axcan Pharma Inc. (TSX-AXP)

* Recent Price: $21.73.

* 52-Week Range: $18.15-$28.95.

* Snapshot: Axcan develops and manufactures pharmaceutical drug products, primarily for the Canadian, U.S. and European markets. Axcan predominantly markets gastrointestinal drug products.

* CEO: Leon Gosselin.

* Head Office: Mont-Saint-Hilaire, Que.

* Vital Stats: Current Price/Earnings Ratio, 19.1; Revenue (last 12 mos), $316.4 million; 5-Yr Revenue Growth, 24.2 per cent; Earnings (last 12 mos), $53.7 million; 5-Yr Earnings Growth, 27.6 per cent; Market Cap, $990.7 million; Shares Outstanding, 45.6 million.

* Pynn's View: "Axcan's latest reported earnings were a little weak, but we think that the long-term story remains intact. They're working on a (potential) blockbuster drug (ITAX, for treating functional dyspepsia) that is in Phase III testing. If this drug works its way through the FDA (U.S. Food and Drug Administration) Phase III testing, we expect it will eventually be approved. This one drug could double, if not triple, the sales of Axcan.

"We're looking at 2007 to be the time frame (for the drug's approval), but you can't wait until 2007 because news is going to come out in 2005 and 2006 concerning the progress of the drug and the Phase III trial, as it works its way to approval by the FDA. This is not a one-trick pony. We think this stock represents good value. The company is profitable and can earn at least $1 per share US (approximately $1.20 Cdn per share) on their current business."

* Trading Strategy: "Over the next 12 to 24 months, we're thinking the stock should be able to double. Obviously, there would be a lot of disappointment in the short term if ITAX didn't get to market but I think that would be a huge buying opportunity."

* Web Watch: www.axcan.com

Second Star

* Shoppers Drug Mart (TSX:SC)

* Recent Price: $41.50.

* 52-Week Range: $29.21-$43.00.

* Snapshot: Shoppers Drug Mart operates retail drug stores under Shoppers Drug Mart and Pharmaprix banners in addition to operating Shoppers Home Health Care, a retailer of medical equipment and devices.

* CEO: Glenn Murphy.

* Head Office: Toronto.

* Vital Stats: Current Price/Earnings Ratio, 28.2; Revenue (last 12 mos), $4.7 billion; Earnings (last 12 mos), $315.9 million; Market Cap, $8.71 billion; Shares Outstanding, 209.8 million. Dividend Yield: .936 per cent.

* Pynn's View: "Shoppers Drug Mart is the industry leader in Canada and they execute extremely well. They have plans to continue to grow the company. They are opening new stores and revamping and expanding old stores.

They work very hard at merchandising their stores to try to improve sales per square foot and margin, so there are a lot of moving parts that can drive profits higher.

"On their last yearend results, they had very strong revenue and profit growth. They continue to generate a lot of free cashflow and they have used that to pay down debts. Their balance sheet is strong, so now they are paying a 10-cent (per share) quarterly and 40-cent (per share) annual dividend. The stock is a little pricey, but it is an extremely high-quality company and it is not really economically sensitive."

* Trading Strategy: "This is a long-term hold. Our average cost is about $30 per share. There is no multiple expansion here because the stock is quite expensive, but we think that they will continue to grow their earnings by 15 per cent per year. Two years from now, it should be worth over $50 and we would look for ongoing dividend growth as well."

* Web Watch: www.shoppersdrugmart.ca

Third Star

* Kingsway Financial Services (TSX:KFS)

* Recent Price: $19.85.

* 52-Week Range: $14.14-$21.48.

* Snapshot: Kingsway offers property and casualty insurance with a specialty in non-standard automobile insurance in Canada and the U.S. through its wholly owned subsidiaries.

* CEO: William Star.

* Head Office: Mississauga, Ont.

* Vital Stats: Current Price/Earnings Ratio, 8.3; Revenue (last 12 mos), $2.4 billion; 5-Yr Revenue Growth, 45.2 per cent; Earnings (last 12 mos), $131 million; 5-Yr Earnings Growth, 38.8 per cent; Market Cap, $902.3 million; Shares Outstanding, 56.18 million; Dividend Yield, 1.016 per cent.

* Pynn's View: "Kingsway's big gig is that they insure high-risk drivers, which is actually quite a profitable business because not many people do it. Their business is split between Canada and the U.S., so you get some geographical diversification.

They are trying to run the business not just to grow the business, but to run it profitably. Management in the past has run into some trouble where they had erratic earnings because they'd grown too quickly.

"A year from now I think this stock can easily trade to $25, so we would be looking at 20-per-cent upside. That doesn't mean that we're necessarily going to sell any, but we don't see $20 to $25 on this stock as being outrageous. Similar to Shoppers Drug Mart - though the stock is half the price - they have initiated a dividend to yield one per cent, so they are paying a nickel per quarter (20 cents) annually. And that is what we look at, companies that initiate dividends and management, sending a signal that things are under control and that they have confidence in the future. We see some ongoing earnings growth in this company and maybe a little bit of multiple expansion."

* Trading Strategy: "A year from now, I think this stock can easily trade up to our one-year target of $25, which is where we'd sell the stock.

If there is a deterioration in their markets due to a lot more competition, prices would drop to the point that the insurance can no longer be written profitably. That does not appear to be happening right now. They are still able to sell insurance policies, which are in the long run profitable."

* Web Watch: www.kingsway-financial.com

* Pynn's Edge Record (past 12 mos): +15 per cent. Best Pick: Gildan Activewear Inc. (TSX:GIL.A) +50.4 per cent.Worst Pick: Axcan Pharma Inc. (TSX:AXP) -22.6 per cent.

Disclosure: Pynn may own shares in the Bissett Canadian Fund in which these stocks are held.

Disclaimer: This feature is provided for information purposes. Investors should do their own research or consult a qualified investment professional before making investment decisions.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)