The market turbulence of the last two years or so has meant that it has been sectors rather than bottom-up fundamentals that have driven performance.
However, with the outlook for markets now far more positive, small and mid cap specialists Hargreave and Slater believe stockpickers will be better rewarded this year.
Here are four of their choices for next year, plus one from Dominion’s Alessandro Hor.
Amerisur Resources
"Amerisur is one I am particularly keen on," said Hargreave (pictured right), who heads up the five crown-rated Marlborough Special Situations fund.
"It is an oil-exploration and production company that is based mainly in Colombia."
"It might be a bit of a surprise choice for some but it is producing cash, has a strong balance sheet and it pays for its own exploration."
"The numbers look very good; because the Colombian government has a very sympathetic fiscal regime, they net $75 a barrel."
"They are currently producing 5,000 barrels a day and that should move up to around 10,000 next year. So if you times 10,000 by 365, then times that by 75, you can see their cash flow will be huge."
"Amerisur has also just got the licence for a new oil field, which is twice the size of their current one. To be honest, it is a stunning business."
The stock is a top-10 holding for Marlborough Special Sits, with a 1.1 per cent weighting. FE Alpha Manager Philip Rodrigs also holds Amerisur in the top-10 of his Investec UK Smaller Companies portfolio.
Cupid
The stock is down 0.91 per cent year-to-date, but Hargreave thinks its fortunes are about to change.
"Cupid, the online dating company, is another stock I like and it is terribly cheap," continued Hargreave.
"The company has got a bit fed up and has introduced a 10 per cent share buyback scheme, which is starting to have an effect."
"Cupid posted 100 per cent earnings last year and it forecasts an earnings increase of 30 per cent next year."
"People think that internet dating is a very grubby business but it is developing and using its clients to sell other products. I think it is very likely to get taken over very soon because now you’ve got this share buyback scheme, it is generating buckets of cash."
Rodrigs also holds Cupid in his top-10.
Entertainment One
"One I am particularly keen on is Entertainment One," said FE Alpha Manager Slater (pictured left), who heads up MFM Slater Growth – the best-performing fund in the entire IMA unit trust and OEIC universe over three years.
"At the moment, it is modestly priced and it provides its investors with low risk but with a good possible upside." "The company is waiting on an anti-trust ruling in Canada, which will be a catalyst for change but it should be seen positively."
Entertainment One is MFM Slater Growth’s second-biggest holding, with an 8 per cent weighting.
AXA Framlington UK Smaller Companies, M&G Smaller Companies and Lazard UK Smaller Companies also hold it in their top-10.
Hutchison China
Slater continued: "Another one we like is Hutchison China, but it is slightly riskier. Investors now have the free option of its research and development (R&D) programme, which could mean that over the next few years the company gets radically re-rated."
"We have held Entertainment Once and Hutchison China stocks for quite a long time and we have bought more of both recently."
"Hutchison China could offer its investors good double-digit growth next year. Its R&D programme has attracted interest from AstraZeneca and Nestle, who are going to help finance their drugs."
"With this, I think value could be unlocked."
Hutchison China is Slater’s biggest holding in the growth fund. It has an 8.19 per cent weighting.
Intercontinental Hotels Group
Alessandro Hor, senior analyst at Dominion funds, tips the hotel chain to perform well next year.
"We anticipate that IHG will follow a continuous growth path in both the medium- and the long-term," he said.
"Like the other hotel group we hold, Club Med, IHG is focusing on the growth of upper-end consumer spending in high-growth economies to develop its strategy."
"Whilst China, US, UK and Germany still account for the majority of business, the priority markets for IHG in the next five years will be the emerging markets of India, Indonesia, Brazil, Russia, Vietnam and Thailand."
"By focusing on higher-growth regions, IHG is well placed to capture the global consumer spending trend that is the core of the DGT Consumer philosophy."
Intercontinental Hotels Group is a FTSE 100 company. GLG UK Select counts it as a top-10 holding.