NEW YORK – The United Kingdom’s economy has its own share of problems, but in a world with numerous troubled economies, the U.K. is a relative bright spot. In a recent report, the International Monetary Fund gave a positive view of the U.K. economic outlook, citing robust future growth and benign prospects for inflation.

U.K. government forecasters expect Britain’s real (inflation-adjusted) gross domestic product will grow 2.6% this year versus a 2.4% increase expected for the U.S. by Forbes/Bridge Economists.

British stocks haven’t been immune to the worldwide decline in equity prices. The bellwether FT-100 index is down 15% so far this year, in line with the decline in the Morgan Stanley Capital International World index.

“I don’t think the British will have quite the downturn that we’ll have here, because they didn’t have the excesses,” says William V. Fries, lead manager of the Thornburg Value Fund (TVAFX) .

Full story at Forbes.com

NEW YORK – “Certain companies strive to have a lot of cash because they want a cushion, particularly in a downturn,” says April Klein, associate professor of accounting at New York University’s Stern School of Business.

For some companies, that cushion may also mean a competitive advantage. Take, for example, Technitrol (nyse: TNL – news – people), a Philadelphia-based manufacturer of electronic components for use in networking and Internet applications. As of its latest reported quarter, the company held $163 million in cash and equivalents, 50% of its shareholders’ equity.

All that cash could serve Technitrol well, according to David D. Weaver, analyst at Legg Mason Wood Walker. “The company has said it’s looking for acquisitions,” Weaver notes, “so it’s nice they have that firepower available, without having to go to the debt or equity markets.”

Full story at Forbes.com

NEW YORK – Shares of Genesco, a Tennessee-based footwear and accessories retailing concern, have more than doubled from last May’s 52-week low. But the stock is down 8% since peaking in mid-February. Where is this stock headed?

According to theories of market sentiment, the upward trend will probably continue. Commenting generally, Bernie Schaeffer, chief executive of Schaeffer’s Investment Research, explains. “If you have a stock that’s in clear bull-market mode,” he says, “and you see strong indications of negative or bearish sentiment, that tells you the uptrend has a good chance of continuing.” Schaeffer adds that “such a pattern shows there’s still skepticism and money on the sidelines.”

Schaeffer and his colleagues specialize in market sentiment indicators–measurements of investors’ bullish or bearish mood. One popular indicator is short interest, or the percentage of a company’s outstanding shares sold on the expectation that they can be repurchased at a lower price. Another is the put/call ratio, which compares the volume of put options to call options. A rising put/call ratio (sells/buys) generally indicates increasing skepticism about a particular stock.

Full story at Forbes.com

NEW YORK – It’s not always easy being a market leader. Someone is always gunning for you. Still, advantages that accompany this status–such as the ability to establish price benchmarks for an industry and attract top-level employees–can be tremendous. And in an economic slowdown, industry leaders can gain market share at the expense of weaker competitors.

One unheralded market leader in the technology space is Acxiom (nasdaq: ACXM – news – people), a developer of real-time software for managing customer information across multiple databases. The firm’s flagship program is a package called AbiliTec.

John Schneller, analyst at CIBC World Markets, thinks Acxiom can stave off the competition thanks to partnerships with companies such as Oracle (nasdaq: ORCL – news – people), IBM (nyse: IBM – news – people), Compaq (nyse: CPQ – news – people), Lockheed Martin (nyse: LMT – news – people) and PricewaterhouseCoopers. “These technology players have made a big bet on Acxiom,” says Schneller. The company recently completed 12 long-term contracts.

Full story at Forbes.com

NEW YORK – “We’re slightly overweighted in technology, which is weird given that we were underweighted six months ago,” muses Thyra Zerhusen, portfolio manager of the Alleghany/Chicago Trust Talon Fund (CHTTX) , a mid-cap blend fund with $30 million under management.

Despite the weakness in technology, Zerhusen’s bet on stocks such as Unisys (nyse: UIS – news – people) and Legato Systems (nasdaq: LGTO – news – people) has helped the fund post a 7% return so far this year versus a 4% decline in the Standard & Poor’s MidCap 400 Index.

Like other successful growth investors, Zerhusen keeps an eye on value. On a price-to-earnings basis, this means choosing stocks trading at estimated P/Es that are less than the projected earnings growth.

Full story at Forbes.com

NEW YORK – Inktomi is one of the stocks featured in Larry Waschka’s new book, Ten Stocks That Could Change the World. Foster City, Calif.-based Inktomi specializes in search software and applications for speeding up Internet traffic. Customers include high-profile names such as Yahoo! and Reuters.

Waschka surely didn’t pick Inktomi (nasdaq: INKT – news – people) for its profitability. In 2000 the company lost $9 million, or 9 cents a share, and is expected to earn less than a penny a share this year.

“I don’t use multiples such as P/E,” says Waschka, a hedge fund manager and author of The Complete Idiot’s Guide to Getting Rich and co-author of Managing Family Trusts. To value these stocks, Waschka prefers to use ratios such as price-to-tangible book value (book value excluding goodwill) and price-to-sales (price divided by trailing sales per share). In fact, based on trailing 12-month sales, Inktomi’s price-to-sales ratio comes in at 6. Waschka calls a price-to-sales ratio of 10 ideal for a company that has superior growth potential.

Full story at Forbes.com

A powerful movement in the U.S. over the past several decades is the de-integration of manufacturing: Witness, for example, the rise of such horizontal companies as Intel, Microsoft, Dell and Oracle in a field that was once dominated by the vertically integrated IBM. But for every trend there is a countertrend from which investors can make money. On this page we focus on companies that are conspicuous for their degree of vertical integration.

Furniture Brands International manufactures furniture in 20 plants and retails the goods in some 100 franchise-owned stores in the U.S. (under the Thomasville brand). It’s a smart strategy, says Margaret Whelan, an analyst at UBS Warburg, not adequately recognized in the multiple (11 times estimated 2001 profits) at which Furniture Brands trades.

Full story at Forbes.com

NEW YORK – “Picking stocks is really about picking the right sectors,” says James Floyd, co-portfolio manager of the Leuthold Select Industries Fund (assets: $7 million). This market-timing strategy is tricky, but Floyd and co-manager and company chairman Steve Leuthold have been successful so far.

From its inception last June, the fund’s total returns were 31.4% through the end of the year. In contrast, S&P 500 lost 10.6%. As of year end 2000, Leuthold Weeden Capital Management had $177 million under management in three public funds and private portfolios.

Floyd and his colleagues at Leuthold start with a universe of 125 industry groups, mostly drawn from S&P and Morgan Stanley Capital International classifications. From there, the 125 groups are ranked using 31 factors such as earnings and sales growth rates, price-to-earnings and price-to-book ratios, insider activity, price momentum, relative strength, and other technical and fundamental metrics.

While using 31 investment criteria might seem a bit unwieldy, Floyd and his colleagues assign the 31 factors into 8 categories, such as value, growth, insider activity and relative strength. Another category, called judgmental, factors in Steve Leuthold’s opinion. Very long-term momentum, the final category, is measured by using algorithms based on long-term upward trends in price and relative strength. Leuthold then cooks up a composite score for each of the 125 sectors.

Full story at Forbes.com

NEW YORK – Bollinger bands, Elliot waves, Gann analysis, Fibonacci retracements, breakouts and stochastics are terms used in the mysterious world of technical analysis. Technical practitioners pick stocks by looking for patterns and trends in price movement and trading activity.

Such analysis can get quite complicated, and the rules on how to interpret trends and patterns can vary according to market conditions. “Where technical analysts earn their money is knowing which technical indicators to use and when to use them,” says John Schlitz, vice president and director of technical research at Instinet Research.

Full story at Forbes.com