Fundamental balance sheet analysis key in more selective market

ON UK GROWTH

SVM's Colin McLean believes investors will punish companies with weak business strategies.

2011 should be a good year for funds focusing on UK growth stocks. The easy credit conditions of 2009 have faded quickly in recent months. Businesses dependent on further refinancing or strong global growth will be challenged in the coming year. This more selective stock market favours fundamental balance sheet analysis. Investors will punish companies with weak business strategies. Slower global growth and tighter credit will favour cash-generative businesses with potential for self-help. Fortunately, there are many of these businesses that can improve margins without strong topline ...