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

Joseph Schacter

FEATURED PRO: Josef Schachter is president of Calgary-based Schachter Asset Management and was the 2003 Edge stock picker of the year, boasting a 69.7-per-cent return on his picks over a 12-month span.
Since the Pro’s 3 Stars was launched 21/2 years ago, Schachter’s picks have returned a phenomenal 114.8 per cent, including a 531.3-per-cent return with Nortel Networks (featured at $1.66).

Schachter’s Perspective: “Based on the decent corporate profits that have been coming out on the third quarter of ’03 and the low interest-rate environment, I believe there’s enough value to move the market up
substantially. Our forecast for the end of this year is for the TSX (composite index) to reach 9,500 (recently 8,695) and the Dow to reach perhaps 12,000 (recently 10,579).

“The sectors I like are technology, energy and the metals. I also believe any company that benefits from a depreciating U.S. dollar will be a winner. I think that although the U.S. dollar appears to be in a holding pattern lately, I think we will see the U.S. dollar weaken again in the second half. The Canadian dollar (recently in the 74-cent U.S. range) at the same time will probably push back to its higher range of the past year to about 78 or 79 cents (U.S.) or maybe to 80 cents.”



FIRST STAR
* Olympia Energy (OLY-TSX)
* Recent Price: $2.83.
* 52-Week Range: $2.47-$4.10.
* Schachter’s 12-month target: $4.20.
* Snapshot: Olympia is a junior oil and gas company with its major properties located in the Alberta foothills. It also has properties in northeast B.C.
* CEO: Peter Salaman.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 8.6; Revenue (last 12 mo.), $47.3 million; 5-Yr Revenue Growth, 61.3 per cent; Earnings (last 12 mo.), $13.3 million; 5-Yr Earnings Growth, 52.5 per cent; Market Cap, $111.53 million; Shares Outstanding, 39.41 million.
* Schachter’s View: “This company is 60-per-cent
natural-gas weighted and 40-per-cent oil weighted. What I like about them is that in the periods of 2001, 2002 and 2003, they were kind of in a holding pattern in their production while working on new projects that took time to come to production. But the new projects will take them up to more than 6,000 (barrels of oil equivalent per day) during Q1 of ’04. We have a cash-flow forecast of $1.07 in 2004, up from 70 cents in ’03. Insiders own 20 per cent of the company.”
* Schachter’s Risk Rating: Medium.
* Web Watch: www.olympia-energy.com



SECOND STAR
* True Energy (TUI-TSX)
* Recent Price: $1.51.
* 52-Week Range: .63-$2.
* Schachter’s 12-month target: $2.40.
* Snapshot: True Energy is a junior oil and gas company focused on properties in west- central Alberta and west- central Saskatchewan.
* CEO: Paul Baay.
* Vital Stats: Current Price/Earnings Ratio, 12.0; Revenue (last 12 mo.), $33 million; 5-Yr Revenue Growth, 295.5 per cent; Earnings (last 12 mo.), $5.8 million; Market Cap, $73.6 million; Shares, 48.71 million.
* Schachter’s View: “This company is also about 60-per-cent natural-gas weighted and 40-per-cent oil weighted. In 2003, the company averaged production of about 3,000 (barrels of oil equivalent per day) and they exited the year at 4,000 (boe).
“My estimate this year is that they’ll average production of 4,400 (boe) and exit at 5,000. We’re expecting them to do cash flow of 47 cents (per share), up from 33 cents last year. The insiders own 16 per cent of the company.”
* Schachter’s Risk Rating: Medium.
* Web Watch: www.trueenergy.ca



THIRD STAR
* Tyler Resources (TYS-TSX)
* Recent Price: $0.285.
* 52-Week Range: $0.025-$0.295.
* Schachter’s 12-month target: $2.50-$3 (speculative).
* Snapshot: Tyler Resources is the operator of the Bahuerachi copper/gold project in Mexico that spans 8,114 acres.
* CEO: Jean Pierre Jutras.
* Head Office: Calgary.
* Vital Stats: Revenue (last 12 mo.), $100,000; Earnings/Loss (last 12 mo.), $100,000 Loss; Market Cap, $10.89 million; Shares Outstanding, 38.22 million.
* Schachter’s View: “Copper is in very short supply and this company has a property in Mexico nearby acopper/gold property of Glamis Gold (one of Canada’s larger producing mining companies), so the infrastructure (for a mine) is there.
“Tyler is doing an aerial survey right now and they think there could be hundreds of millions of tons . . . if that is the case, this could come into production over the next two or three years. If they can prove it up to the point where a major comes in, and some (major companies) have already talked to them about doing a farm-in or taking the company over, usually you have a market cap at that time of $200 million or $300 million. . . .”
* Schachter’s Risk Rating: High.
* Web Watch: www.tylerresources.com

Schachter’s Edge Record: +114.8 per cent. Best Pick: Nortel Networks (NT-TSX) +531.1 per cent. Worst Pick: Olympia Energy (OLY-TSX) -6.6 per cent.

Disclosure: Schachter says he has provided research on a contract basis on Olympia Energy and True Energy to Maison Placements, a Toronto investment firm. Schachter’s family owns shares in Tyler.