Yahoo Finance The Fantasy Fund Manager stocks tipped for the biggest gains
Big bets on Tesco, Shell and Vodafone shares could be the keys to winning the third season of the Telegraph's Fantasy Fund Manager competition.
Using Tipranks, a website that collates analyst ratings, Telegraph Money has found the FTSE 350 companies attracting the most bullish recommendations from stock market experts.
Tesco, the supermarket chain, is top. The £18bn firm did well in the early stages of the pandemic as grocers were one of the few shops permitted to stay open.
But the shares have trailed the broader recovery in the British stock market since November, sparked by breakthroughs in the development of coronavirus vaccines.
The consensus is that the firm is a “strong buy”, with an average target price of 353p that is 52pc higher than the shares' current price of 232p.
Clive Black, of broker Shore Capital, said: “Tesco is coming to the end of a tumultuous year in good shape and heart, in our view."
"Ken Murphy, the chief executive, will no doubt chronicle a remarkable year for the business, one in which it contended with the challenges and opportunities posed by the pandemic, completed the disposal of its Asia business and further underscored Tesco as an industry leader.”
On a different trajectory to Tesco, oil giant Shell had a torrid time in the early stages of the pandemic. The oil price crashed as planes were grounded, manufacturing stopped and people worked from home, reducing car usage.
The shares are still 38pc below the level at which they stood at the start of 2020, before the pandemic struck, and have trailed the recovery in the oil price from its April lows. Brent crude has shot up from less than $20 (£14.50) per barrel to $63.90 today – around its pre-Covid level.
Mark Nelson of Killik & Co, the broker, said the company had been hit by the Texas winter storm, which had caused a number of production and manufacturing issues.
“More positively, the company is expecting to report the benefits of the improved commodity price relative to the fourth quarter of 2020,” he said, rating the shares a "buy".
Overall, analysts have an average target price of £19.10 on the shares, 44pc higher than their current £13.29 price.
In third place, Vodafone is another expected to do well according to the experts. The telecoms giant has a 5.8pc yield that should make it attractive to income investors.
The stock market launch of Vantage Towers, the mast business being spun out from the firm, should also allow the business to cash in on its mobile infrastructure.
Shares in the £38bn company trade at 134p but analysts are targeting 179p, giving 34pc potential upside.
Other FTSE 350 stocks rated highly by analysts include Bermuda-based insurance firm Lancashire Holdings, cigarette maker British American Tobacco and cyber security firm Avast.
