New Year Stocks from Europe

Investors wanting to add stocks to their portfolio in the New Year should look for companies with strong balance sheets and cash flow like BSkyB, Nestle and Zurich Life, Anna Barnfather, head of equities research from Jefferies International, told CNBC.

"It’s actually a very crucial time for stock picking. As we move into 2009 the market will start to differentiate a little bit more between stocks within sectors and actually get back to fundamentals," Barnfather said.

Stocks that Barnfather singles out as being good investments for 2009 are broadcaster BSkyB, food-producer Nestle, insurance-firm Zurich Life, technology firms Misys and Dialog and hotel group Accor.

(Watch the video above for the full interview with Anna Barnfather).

"The primary goal has got to be avoiding forecast risk and I think on top of that on everyone’s concern is balance sheet strength," she said.

Strong leadership and geographic diversity are also traits to look out for when picking stocks, she added.