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Number Cruncher

Eclectic equity mix taps shifting global economy Add to ...

What are we looking for?

This is the final look this week at the top securities in mutual funds.

Every quarter, we check out the major holdings of several investments to find out what the pros are buying. For investors, it's a good way to gain more insight into a fund, or get stock tips to begin further research. Today, we examine Brickburn Small Cap Fund at www.brickburn.com .

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More about the fund

The $5-million Canadian focused small-mid cap equity fund is run by Evan Spiropoulos of Brickburn Asset Management Inc. The fund has posted a 46-per-cent gain this year to Wednesday, and has racked up a 27-per-cent return over the year ended Sept. 30.

Mr. Spiropoulos is a value manager, but also examines the macroeconomic picture and other trends when looking at stocks for the long term.

He sees the emergence of a global economy shifting eastward, and the cycle of rising commodity prices nearing an end. Commodity prices will float around at higher levels than in the past, but "we are not going to see new highs again," he suggested. "What I am overweight is companies that make things - not just for the North American, but also for a global market."

What did we turn up?

An eclectic mix of stocks that have been mostly rebounding.

Neo Materials Technology Inc. is a producer and refiner of rare earth materials that are bought by companies that make electronics, Mr. Spiropoulos said. "They are one of the dominant players globally. … They have had a very difficult time in this recession, but have been able to maintain good cash flow and a very good balance sheet," he noted. "They will ride with the economy coming back."

Aegean Marine Petroleum Network Inc. operates a fleet of tankers that supplies fuel to cargo ships at sea. It will not only benefit from continued growth in global trade, but also from new regulations spreading around the globe that require refuellers to have safer, double-hull - instead of single-hull - ships, he said.

Aegean has built its business with the new rules in mind, and will have a fleet of about 50 mostly double-hull ships by the end of 2010, he said.

Evertz Technologies Ltd. makes high-performance hardware and software for the television industry, and is considered to be one of the best makers of equipment to broadcast in high definition, Mr. Spiropoulos said. "That is where the market is going over the two to three years."

Europe and Asia are lagging North America, but "we know that both of those areas are also going to high definition," he added. "So you have a company that is well positioned in North America … and now the international market is starting to come in behind it."

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