High corporate cash levels and returns on equities refocuses market to growth

During the past three years there has been a strong focus on short-term free cash flow generation and dividend yields. This has led to a situation where companies with strong structural growth prospects are very attractively valued. High corporate cash levels, combined with strong balance sheets and high returns on equity, will lead to a refocusing on growth in the equity markets. This is a development that is partly fuelled by the recent strong pick-up in M&A activity. Our analysis shows that companies that are innovative and invest for future competitive edge are significantly undervalu...