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

FEATURED PRO: Josef Schachter is president of Calgary-based Schachter Asset Management.

Schachter’s perspective: “The market is in a troughing process again but I think now there is a lot of cash on the sidelines and an oversold condition. If people see strong earnings (in the third quarter) start to come out and there is a decent economy, we could see a pretty healthy market from October to the end of the year.”

Schachter cautions that all of his top picks are high-risk plays.



FIRST STAR
* Olympia Energy (OLY-TSX)
* Recent Price: $3.03.
* 12-Month Range: $1.15-$4.50.
* Schachter’s 12-Month Target: $4.
* Snapshot: Olympia is a junior oil and gas company with land holdings in Alberta’s foothills area and northeastern B.C.
* CEO: Peter Salamon.
* Head Office: Calgary.
* Vital Stats: Revenue (last 12 mos), $31,387,000; Profit (last 12 mos), $1,034,000; Market Cap, $112.3 million; Shares Outstanding, 37.4 million.
* Schachter’s Comment: “This company has some big upside potential with projects like the Big Horn project (on land it purchased from the Stoney First Nation earlier this year) and Boltan. I think that they can produce 70 cents cash flow (per share) in 2003 and the upside is $3.50 to $4 based on these projects.”
* Schachter’s Risk Rating: High.
* Web watch: www.olympia-energy.com



SECOND STAR
* Canadian Superior Energy (SNG-TSX).
* Recent Price: $1.43.
* 12-Month Range: $1.17-$3.41.
* Schachter’s 12-Month Target: $2.
* Snapshot: Canadian Superior is an oil and gas company boasting one of the largest holdings in offshore Nova Scotia with a 100-per-cent interest in 934,065 acres and also has producing wells in Western Canada.
* CEO: Greg Noval.
* Head Office: Calgary.
* Vital Stats: Revenue (last 12 mos), $5.6 million; Profit/Loss (last 12 mos), $1.6 million loss; Market Cap, $79.1 million; Shares Outstanding, 56.7
million.
* Schachter’s Comment: “The stock has been beaten up (due to recent news that the company had abandoned drilling at an expensive well in its offshore Nova Scotia project) but it should be worth $1.50 based on its Western Canada projects alone. There are still great (potential) fields out there (offshore Nova Scotia) and El Paso hasn’t walked away from their partnership with SNG (for east-coast operations). The land value in the east is also worth something.”
* Schachter’s Risk Rating: High.
* Web watch: www.cansup.com



THIRD STAR
* Nortel Networks (NT-TSX)
* Recent Price: $1.66.
* 12-Month Range: $1.20-$14.24.
* Schachter’s 12-Month Target: $4.
* Snapshot: Nortel is still Canada’s highest-profile tech company, supplying Internet, telecommunications and fibre-optics technologies to service providers and enterprises spanning wireless and metro networks.
* CEO: Frank Dunn.
* Head Office: Brampton, Ont.
* Schachter’s Comment: “I don’t think Nortel is going under and I do think we’re going to see a recovery for tech stocks over the next 12 months. Nortel is trading at 0.4 times revenues (per share). If the company is profitable in 2003, which I believe they can be, they should trade at
1 - 11/2 times revenue (per share). I think Nortel has raised enough money now to survive.”
* Schachter’s Risk Rating: High.
* Web watch: www.nortelnetworks.com
* Schachter’s Record (with Jan. 3 and May 16 picks): -20.5%. Best Pick: Halliburton (HAL-NYSE) +9%; Worst Pick: Nortel (NT-TSX) -83%.
* Disclosure: Schachter says his company has investments in all three featured Companies.