(Business Edge columnist Gyle Konotopetz regularly profiles the top three stocks 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 provides research to other firms such as Maison Placements.

Schachter’s Perspective: “I think oil and gas stocks are very good value here. I’ve told our clients that by the end of June if we don’t see a buildup of inventory, that would indicate that we really do have tight supplies. The U.S. government has now admitted that by 2005, the physical demand for energy is going to be greater than the physical supply and that’s assuming Iraq can produce two-and-a-half million barrels. So I anticipate a range of $38 to $42 (US per barrel) for oil prices for the next four to five years.

“I also think there’s some good value in technology stocks because of how washed out the sector has become and I think the financial services companies have been beaten up more than they should be over worries of higher interest rates.”



First Star
* Vaquero Energy (VAQ-TSX)
* Recent Price: $3.30.
* 52-Week Range: $1.48-$3.65.
* Schachter’s 52-week Target: $5.
* Snapshot: Vaquero is a junior oil and gas company with properties in west central Alberta.
* CEO: Robert Waldner.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 25.3; Revenue (last 12 mos), $19.6 million; 5-Yr Revenue Growth, -8 per cent; Earnings (last 12 mos), $4.4 million; Market Cap, $142.99 million; Shares Outstanding, 43.33 million.
* Schachter’s View: “This company had production of 2,657 (barrels of oil equivalent per day) in the first quarter, beating our target of 2,600 (boe/d). We were looking for 10 cents in cash flow (per share) but, because of rising (commodity) prices, they did 13 cents. In the fourth quarter, we expect they will be doing north of 4,000 (boe/d).”
* Schachter’s Risk Rating: Medium.
* Web Watch: www.vaquero.ca



Second Star
* Endev Energy (ENE-TSX)
* Recent Price: $1.22.
* 52-Week Range: .96-$2.70.
* Schachter’s 52-week Target: $2.
* Snapshot: Endev is a junior oil and gas company with a production and reserve ratio of approximately 50 per cent oil and 50 per cent natural gas from its Alberta properties.
* CEO: John Driscoll.
* Head Office: Calgary.
* Vital Stats: Current Price/Earnings Ratio, 20.3; Revenue (last 12 mos), $35.9 million; 5-Yr Revenue Growth, 53.2 per cent; Earnings (last 12 mos), $8 million; Market Cap, $105.51 million; Shares Outstanding, 86.48 million.
* Schachter’s View: “This company missed its numbers (boe/d) in the fourth quarter of last year and that’s when the stock got hurt. However, in January they finally got their act together and their quarter one results were much improved with 3,428 (boe/d) and seven cents (per share) in cash flow. Current production is north of 3,300 (boe/d) and we expect them to end the year at 4,500 (boe/d).”
* Schachter’s Risk Rating: High.
* Web Watch: www.endevenergy.com



Third Star
* Canadian Superior Energy (SNG-TSX)
* Recent Price: $1.77.
* 52-Week Range: $1.24-$4.88.
* Schachter’s 52-week Target: $3.
* Snapshot: Canadian Superior has producing wells from its Drumheller project and also has oil and gas properties off Nova Scotia and off Trinidad and Tobago.
* CEO: Greg Noval.
* Head Office: Calgary.
* Vital Stats: Revenue (last 12 mos), $53.2 million; 5-Yr Revenue Growth, 88.1 per cent; Earnings/Loss (last 12 mos), $100,000 Loss; Market Cap, $157.54 million; Shares Outstanding, 89 million.
* Schachter’s View: “We think the stock has been washed out to the approximate value of their Western Canada operations and we also like the prospects offshore Trinidad where they’re focusing on oil. We think that Trinidad, if it works, could be worth a couple of dollars a share. We also think there’s still some value on the east coast (where the Mariner well was abandoned) even though there’s no drilling going on at this time.”
* Schachter’s Risk Rating: High.
* Web Watch: www.cansup.com

Schachter’s Edge Record (past 12 months): +12.7 per cent.

Best Pick: Vaquero Energy (VAQ-TSX) +120 per cent.

Worst Pick: Calpine Corporation (CPN-NYSE) -33.5 per cent.

Disclosure: Schachter says he does not personally own shares in the featured stocks. He provides research on them on a contract basis to Toronto firm Maison Placements.