Shocks aside, 2011 set to be great year for ‘stock pickers’

STOCK markets could deliver double-digit growth this year, but that optimistic forecast could be in tatters by the year end.

The optimistic forecast is predicated on there being no major shocks in 2011 to derail business confidence or undermine consumer sentiment any further.

In his preview of what 2011 may hold for investors Barry Dixon of Davy Research says those who come out of 2011 well will be “stock pickers”.

2010 proved to be a volatile year for both markets and sectors and a difficult year in which to make money, he said.

This year will not be much different but it could be “a great year for stock pickers,” he said.

In the absence of any major shocks, equity markets could deliver double-digit returns in 2011.

For those contemplating a punt the following considerations could help to lower the risk and ensure a good return by year’s end.

Key considerations to look for prior to buying shares in the current climate include strong market positions and/or technology that facilitate pricing and volume growth and margin recovery.

His preferred list of large-cap stocks that “we are happy will outperform broad markets in 2011” include CRH, HeidelbergCement, Travis Perkins, Grafton Group and Smurfit Kappa Group in the industrial category.

In the consumer space, Kerry Group, C&C, Paddy Power, DCC and United Drug are favoured while Ryanair, Easyjet and ICG as stocks that will “outperform markets in 2011”.

For investors looking for stocks that could double he has chosen CPL Resources, Total Produce, Petroceltic and Ormonde Mining.