Cashflows and pricing power key to returns

We are actively seeking exposure to the media sector.

While consumer spending could come under pressure given concerns over unemployment, rising rates and taxes, corporate sector finances are in good health. Free cashflow as a proportion of GDP is at record levels, and we know from CBI data business confidence is showing signs of improving. With 70% of media sector revenues geared into corporate spending, the sector, and advertising in particular, will benefit from increased demand and pricing power. We also attempt to identify sectors with capacity constraints likely to drive pricing power and outperformance in 2010. Evidence of this capac...