Most of our tips were from outside the blue chips, where stocks remained unloved. There were some notable exceptions, however. WS Atkins, the engineering and consulting group, finished the year strongly after calling off merger talks with P&O's Bovis Homes subsidiary. Chorion, the former Trocadero group, also tootled along merrily after picking up the rights to the Noddy and Big Ears books. And Eurotunnel, that perennial under-achiever, turned in a solid performance on the back of improving passenger figures and its first "profit" following a debt restructuring.
At the bottom of the league, Tamaris, the nursing home company, looked sickly. Northern Leisure, the nightclubs operator, called off takeover talks in the spring and the downturn in consumer spending hit it hard.
But the logic of some of the tips remains intact. Readers who bought BSkyB should hang on as the stock still looks under-valued. And BTR was tipped on the basis that if things continued to slide it would fall to a takeover. It did, but the merger with Siebe only emerged after the stock had fallen further than expected.
This year is likely to be difficult. Growth stocks will be few and far between as fear persists about weak consumer spending, price deflation and weak economic growth. For that reason the best course of action when considering FTSE 100 stocks, is to look for recovery potential.
For that reason we like the look of Bass (881.5p). Shares in Britain's biggest brewer are well below their peak of 1175p in the spring. It has been hit by fears over consumer spending but its purchase of Intercontinental Hotels offers more balance and its portfolio of drink and pub brands such as All Bar One, is among the strongest.
In retailing, the supermarkets look undervalued and Asda (161.5p) is trading at a discount to the sector. The shares are around 30 per cent lower than their 1998 peak.
Barclays Bank (1296p) may be worth a punt after its recent woes. Despite Martin Taylor's surprise exit from the chief executive's hot seat a couple of months ago, the basic high-street banking business remains in good shape. The shares have rebounded from their 838p level in October but are still well down on their 1946p peak and trading at a considerable discount to rivals.
Outside Footsie, another recovery stock is Churchill China (87.5p), the specialist manufacturer of tableware. The strength of sterling has depressed export prices, and the Asian crisis wiped out sales in Korea and the Pacific Rim, while frustrated exports have depressed prices on the home market. But the company is ungeared and its technical problems have been virtually solved.
Seton Scholl Healthcare (837.5p)looks like a safe bet. The group, formed by merger of Scholl, the maker of the famous medical sandals, and Seton, the over-the-counter drug specialist, is one of the leading healthcare players in the UK and continental Europe. Those two markets are expected to buck the gloomy economic outlook and grow by around 8-10 per cent for the next few years.
Hanson (477.5p)is a solid rock in the crumbling building materials sector. Unlike its unfancied peers, the rump of Lord Hanson's empire is less vulnerable to the UK economic slump. After an aggressive spending spree on bolt-on buys, over half of Hanson's profits come from the US, which is on the verge of a boom thanks to a $216bn government roadbuilding programme.
Support services could do well this year as contracting-out is more popular in downturns. Skills Group (181.5p), is shifting from low-margin distribution to more lucrative computer services, but has yet to reap the benefits in share price terms. The group has net cash of pounds 33m to fund bolt-on acquisitions and with a forward multiple of just 12, a rerating looks overdue.
DCC (520p), the Irish industrial holding company, has an odd mix of businesses in healthcare, food, energy and computer distribution. But it has proved a successful combination and its "localisation" business, which adapts computer software for European and Asian markets, is booming. Analysts are impressed with the company's progressive management, and good acquisition record.
For a play on the explosive growth potential of the Internet, investors with strong stomachs should have a look at Zergo. Two weeks ago the firm became the world's second-largest supplier of security software, which allows people to trade safely on the Internet, when it merged with its Irish rival, Baltimore, in a pounds 35m deal. Not for widows and orphans, but worth a punt.Reuse content