(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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Ross Healy, president, chief executive officer, Strategic Analysis Corp. The company’s research is based on a theory of balance-sheet solvency.

Healy’s Current Strategy: “I’m still very cautious and I’m really focused on value. Buy cheap and cross your fingers because this is not a good environment. I think, at best, the market will have a fairly wide trading range, but will go sideways long-term. The market’s got to get a lot cheaper. These are all low-risk stocks. Generally speaking, I’d say that, in three years out of four, low-risk stocks out-perform high-risk stocks. At least, that’s been our evidence going back to 1993. I think the pendulum is going back to (investing through) active management opposed to picking index funds. I think by the time everything is said and done, if you say index funds to anyone, they’ll spit on you.”



FIRST STAR

* Newmont Mining (NEM-NYSE) (figures in U.S. dollars).

* Recent Price: $21.84.

* 12-Month Range: $14-$25.23.

* Snapshot: Newmont Mining is in the process of acquiring two other major players in the gold mining industry, Franco-Nevada and Normandy Mining. Once the transaction is complete, Newmont will leapfrog AngloGold and Barrick as the world’s No. 1 gold producer and the company aims to become the world’s biggest unhedged gold miner. Currently, Newmont boasts proven and probable reserves of 66.3 million ounces of gold and 6.1 billion pounds of copper.

* CEO: Wayne Murdy.

* Head Office: Denver (10,800 employees).

* Vital Stats: Revenue (last 12 mos), $1.7 billion; Net loss (last 12 mos), $27.6 million; Market Cap, $4.3 billion; Shares Outstanding, 196 million; Dividend Yield, 0.5%.

* Healy’s Comment: “They’ve strengthened themselves greatly with the takeover of Franco Nevada. There’s a huge improvement in their balance sheet. When markets are weak, bullion tends to trend higher, so I stay with golds in this market.”

* Healy’s Risk Rating: Low.

SECOND STAR

* Cooper Industries (CBE-NYSE)



* Recent Price: $36.40 (figures in U.S. dollars).

* 12-Month Range: $30.20-$60.45.

* Snapshot: Cooper makes electrical products (80 per cent of sales), tools, hardware and metal support products. The company operates about 120 manufacturing plants, primarily in North America and Europe. Since rejecting a second takeover bid from Danaker, the company is weighing other offers.

* CEO: John Riley Jr.

* Head Office: Houston (34,250 employees).

* Vital Stats: Price/Earnings Ratio, 14.9; Revenue (last 12 mos), $4.2 billion; 5-Yr Revenue Growth, -4.4%; Net Income (last 12 mos), $231.3 million; 5-Yr Earnings Growth, -0.7%; Market Cap, $3.4 billion; Shares Outstanding, 93.7 million; Institutional Ownership, 64.7%; Dividend Yield, 3.8%.

* Healy’s Comment: “Although this company makes electrical equipment, it’s not a high-tech kind of a company. It’s more of a good, solid hardware and manufacturing company and it’s cheap. I also like the fact that it has a 3.8-per-cent yield. It’s a good defensive play.”

* Healy’s Risk Rating: Low.


THIRD STAR

* Canadian Natural Resources (CNQ-TSE)

* Recent Price: $41.40.

* 12-Month Range: $35.90-$52.35.



* Snapshot: Canadian Natural is a senior oil and gas company with operations focused in Western Canada, the North Sea and offshore West Africa through its wholly owned subsidiary, Ranger Oil.

* President: John Langille.

* Head Office: Calgary (943 employees).

* Vital Stats: Price/Earnings Ratio, 5.8; Revenue (last 12 mos), $3.9 billion; 5-Yr Revenue Growth, 44%; Net Income (last 12 mos), $875.1 million; 5-Yr Earnings Growth, 50.1%; Market Cap, $5 billion; Shares Outstanding, 121.2 million; Institutional Ownership, 29.1%; Dividend Yield, 1%.

* Healy’s Comment: “This is a longer-term pick. I know that the earnings forecast is in a downtrend, but I think that if the stock hasn’t already fully discounted that, it has heavily discounted it. If you compare a company like Suncor Energy (to Canadian Natural), it’s trading at about four times book (value) while CNQ is trading at just a mild premium to book.”

* Healy’s Risk Rating: Low.

* Healy’s Record (Nov. 8 picks): +3% (Trilon Financial +13%, Barrick Gold +6%, Husky Energy -11%). * Disclosure: Healy says he does not personally own any of the stocks although he does own Franco-Nevada, which is being acquired by Newmont.