We’ve sighted a strange new animal prowling the Street.

It’s a new breed of technology analyst, a welcome sight for sore portfolios.

This one speaks softly, carries a big calculator and, most importantly, does not travel in huge packs.

Reality is the new buzzword on the Street and now, in the eyes of many tech analysts, the numbers – the bottom-line numbers – tell the tale.

This is a far cry from the tech analyst who contributed to the tech bubble by pitching fantasy and fairytale. Then, the story was all that counted and virtually everything tech was a buy.

The old curmudgeons with their calculators and old-fashioned fundamentals couldn’t sleep at night, wondering if they’d missed something.

The hotshots dismissed the Warren Buffetts of the investing world as old school.

Some research analysts such as Wall Street hotshot Jack Grubman, once WorldCom’s biggest cheerleader, seemed to forget about the research part of his job title, or were coerced into doing so.

While the tech bubble bred a host of cloned analysts who operated almost in lock step, the Street now seems a safer place with contrasting views on many high-profile tech stocks.

For example, there’s a healthy love-hate relationship with Telus (T-TSX) in the analyst community, where the ratings range from strong buy to strong sell.

Sure, there are still some over-zealous sorts out there pumping stocks with blood-red balance sheets, and no doubt always will be. Yet, there are more and more tech analysts emerging who seem genuinely interested in bringing some common sense to the research game.

Calgary tech analyst Brian Purdy seems to fit the mould of this new breed of analyst who doesn’t live and die by the buy signal.

Purdy, a telecommunications and wireless specialist with Acumen Capital Finance Partners, conks you over the head with his calculator, underscoring the cold, hard numbers and resisting the temptation to hype the story.

You ask Purdy for his top picks in telecom and he tells you to hold the phone. He confesses to covering only three telecoms, only one of which is a buy. The other two are holds, once a dirty word in the analyst community.

His lone telecom pick, Aastra Technologies (AAH-TSX), is about as sexy as Air Canada. Even Warren Buffett could understand this one. They make phones and they make money ($23.8 million in profit in 2002).

In a Canadian telecommunications environment in which spending is expected to contract this year, basic companies in basic businesses stand out, according to IDC Canada analyst Lawrence Surtees.

Purdy covets those telecoms with positive cash flow and solid balance sheets.

“Any new market development is very slow, so if you’re going into a new product or service area, you can’t expect to make money from Day 1 because these new areas aren’t growing very fast,” says Purdy.

“I’m looking for companies that can make money today on products and services that they’re currently providing. I’m also looking for companies that don’t have debt, or too much debt, and those that preferably have cash on the balance sheet.

“With so much uncertainty in the economy today, you never know when you’re going to have to ride a quarter or two of slowness.”

Purdy’s hold ratings are on CSI Wireless (CSY-TSX), a Calgary company, and Cygnal Technologies (CYN-TSX).

“CSI is doing an excellent job of bringing out new products, growing their revenues, and some of that is beginning to flow down to the bottom line,” says Purdy, a former researcher with Nortel Networks (NT-TSX) who joined Acumen Capital in the 2001 post-tech bubble.

“However, the reason I have it as a hold is that I’m a little concerned about the company’s balance sheet. They do have a fair bit of debt and I worry that maybe the debt is a little more than they can manage.”

Purdy believes the “shrinkage” in telecom over the past three years has brought some stability to the market, but still doesn’t venture a guess as to when a recovery may occur.

“There was so much capital chasing those new growth markets a few years ago and so much competition, that some of those areas are still undergoing contraction where there is over-capacity,” says Purdy.

Bottom line: Essentially anything that was sexy during the tech-mania days doesn’t make it on the radar screen of the new breed of tech analyst.



HOT ALBERTA STOCK: Wi-LAN
WIN-TSX $1.55
Up 16 cents (+11.5%) on 396,575 shares (for week ending April 4).
One-time Bay Street tech darling Wi-LAN reminded everybody that it’s alive and well with an impressive bit of news, having struck an $8.8-million research and development pact with the federal government for development of next-generation wireless technology.



COLD ALBERTA STOCK: GAUNTLET ENERGY
GAU-TSX $1.05
Down 45 cents (-29%) on 6,780,145 shares
(for week ending April 4)
Gauntlet sent more shareholders stampeding to the exits with the old strategic-alternatives- to-enhance-shareholder-value news release. The Calgary company has formed a committee to explore alternatives and retained Griffiths McBurney & Partners as an adviser. Water problems at some of its wells and lowering of reserve estimates has earned Gauntlet the dubious distinction of coldest stock on the TSX with a year-to-date plunge of 90 per cent.