Stock picking has some of the qualities of a treasure hunt. The goal is to find stocks that others have not seen — or at least not appreciated. Here are some stock picks that are off the beaten track, from fund managers who specialize in doing exactly this. From a printer of euros to a worm-farm company, these are not mega-caps such as the Royal Bank of Canada that are followed by hundreds of analysts, but are companies with potential that has yet to be appreciated by the market.

DEEP VALUE MANAGER

Irwin Michael buys stocks that seem to be unassailable bargains. At 57, he’s running hard to keep up with his own record. That includes a 121.8-per-cent gain in his Toronto-based ABC Fundamental Value Fund in 1993. He plays down the success as a once-in-a-career year.

Mr. Michael’s ABC Dirt-Cheap Stock Fund is up 31.5 per cent for the 12-months ended Sept. 30, almost twice the 18.7-per-cent return of the Canadian-focused small- to mid-capitalization equity fund average.

His knack: Buying companies with large discounts to book value and other metrics, hidden assets, negative market sentiment and a reasonable chance of getting some respect.

Among his top picks is Whitemud Resources Inc. (WMK-TSX), a Calgary-based company that digs up kaolin, a paper and concrete additive. Mr. Michael bought it at a net asset value of $8; the shares closed yesterday at $10.45. He also owns Dublin-based Babcock & Brown Air Ltd. (FLY-NYSE), which pays an 8.7-per-cent dividend that he expects to grow by 15 per cent next year.

And a remarkable find: Fortress Paper Ltd. (FTP-TSX), a Vancouver-based company that owns a Swiss printer that makes passport paper and prints euros. Fortress has a replacement value of $425-million and a market capitalization of nearly $79-million. That’s an 80-per-cent discount to net asset value, he says. RELATIVE VALUE MANAGER

Roger Dent, 46, started his career in corporate finance at Wood Gundy and eventually became a small-cap hunter for Mavrix Fund Management Inc. in Toronto. His Mavrix Strategic Small Cap Fund produced a 35.9-per-cent return for the 12 months ended Sept. 30, and beat every other Canadian-focused, small- to mid-cap fund from 2003 to 2006. His method: value stock picking.

I have spent 15 years building a network of contacts, he says, noting the usual value measures of price-to-earnings and price-to-sales do not work well when companies are in early stages.

Among his winners — VendTek Systems Inc. (VSI- TSX-VEN), a Vancouver company that operates electronic systems for merchants to load time on prepaid cellphone cards. Purchased at 25 cents, the shares closed yesterday at $1.07.

He picked Centenario Copper Corp. (CCT-TSX), a Toronto-based miner with a soon-to-be launched operation in Chile. Shares purchased at $1.50 closed yesterday at $6.60 and could go to $12.50 in a year, which would be five-to-six times estimated cash flow, he says.

His most unusual pick is reWORKS Environmental Corp. (REW- TSX-VEN), a Toronto-based worm farm that turns food processors’ scraps into castings, that is, worm-poop fertilizer. The stuff is eco-friendly and can be walked on soon after application, which is not true for alternatives such as compost. Shares purchased at 22 cents are trading at 11 cents. One reason for the drop: The company’s production growth is on hold until the workers, that is, the worms, get amorous, Mr. Dent notes. Shares could go to 40 cents in a year, he suggests.

GROWTH MANAGER

Gerry Brockelsby, partner and chief investment officer at Marquest Investment Counsel Inc. in Toronto, has a recent record any stock picker could envy. His Marquest Bridge Fund, started in mid-2005, has not weathered a full market cycle, but is up 45.8 per cent for the year ended Sept. 30, more than twice the 19.9-per-cent return of the S&P/TSX composite index in the period. He wants growth companies that, he says, have pariah characteristics that others won’t touch. When market psychology is negative, that is the time to buy, he says.

Among his top current picks — Timminco Ltd. (TIM-TSX), a Toronto-based company that mines the raw material for silicon wafers for making solar panels. He paid $2.30 a share last April; the shares closed yesterday at $14.66.

He bought Ipico Inc. (RFD-TSX-VEN), a Burlington, Ont.-based maker of radio frequency identification tags that work in moist environments where other RFID technologies do not work. Shares purchased at 65 cents closed yesterday at $1.xx and could hit $1.75 within 12 months, he says.

Another pick, SilverBirch Inc. (SVB-TSX-VEN), develops games for PDAs and cellphones. Shares purchased at 9 cents last November are trading at 34 cents. The games are sponsored and come with ads. It’s new media for the under-35 set, he says. If they play, they get pitched, and if they like it, the company’s fortunes will rise. Call it micro-marketing, it is a new way to get eyeballs, he says. TECH INVESTOR

Howard Sutton, trained as an engineer, has run the Tera Capital Global Innovation Fund since its inception in October, 1998. For the three years ended Sept. 30, the fund was in the No. 2 spot in the science and tech sector with a compound annual return of 47.5 per cent. The winner was the U.S.-dollar version of the fund with an average annual compound return of 59.6 per cent. The median average annual compound return for science and tech funds was 6.2 per cent for the period.

Among his current picks: Active Control (ACT-TSX-VEN), a Burlington, Ont.-based wireless communication company specializing in tough environments. He paid 6 cents a share in March, 2006. It is now trading at 66 cents.

He bought Detroit-based data manager Perceptron Inc. (PRCP-Nasdaq) at $10.36 in August; it closed yesterday at $14.43.

Mr. Sutton invested in Newport Beach, Calif.-based Acacia Research (ACTG-Nasdaq), for which he paid $14.50 in mid-summer; shares closed yesterday at $16.05 (U.S.). These are not common picks, but, as he says, if you just want Cisco, you can buy an ETF.

*****

Looking for value in unexpected places

IRWIN MICHAEL

ABC Fundamental

Value Fund

Style: Looks for small and medium-sized companies with hidden

assets.

Hot pick: Dublin-based Babcock & Brown Air pays an 8.7-per-cent dividend, and he expects that to improve by 15 per cent in the next year.

Mavrix Strategic Small Cap Fund

Style: Likes to use his network of contacts to root out value stocks.

Hot pick: Worm-farming ReWORKS Environment makes fertilizer. Its shares are down, but once the worms start reproducing there could be plenty of profit to spread around.

GERRY BROCKELSBY

Marquest Bridge Fund

Style: Seeks pariah companies that other investors are staying away from.

Hot pick: Timminco — no longer a pariah — mines the material used to make solar panels. It traded for less than $3 last April and now hovers around $15.

HOWARD SUTTON

Hot pick: Active Control is a wireless company specializing in tough environments. He paid 6 cents a share last March, and it now trades closer to 60 cents.