Top of the tips: three stocks to deliver victory

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 analysts’ ratings, Telegraph Money has found the FTSE 350 companies that have attracted the most bullish recommendations from stock market experts.

Tesco is top. The £18bn supermarket chain did well in the early stages of the pandemic when grocers were among the few shops permitted to stay open. But the shares have trailed the broader recovery in the London stock market since November, sparked by breakthroughs in the development of coronavirus vaccines.

The consensus is that the stock is a “strong buy”, with an average share price target of 353p – about 50pc higher than the current price.

Clive Black of Shore Capital, a stockbroker, said: “Tesco is coming to the end of a tumultuous year in good shape and heart.

“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 from Tesco, 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 about 40pc 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 lows in April last year. Brent crude has rallied from less than $ 20 (£ 14.50) per barrel to around its pre- Covid level of $65.

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 problems.

“More positively, the company is expecting to report the benefits of the improved commodity price relative to the fourth quarter of 2020,” he said. He rated the shares a “buy”.

Analysts have an average target price of £ 19.10 for the shares, about 45pc higher than their current price.

In third place, Vodafone is another stock that the experts expect to do well. The telecoms giant’s 5.8pc yield should make it attractive to income investors.

The stock market launch of Vantage Towers, the mast business being spun out from the company, should also allow it to cash in on its mobile infrastructure.

Analysts are targeting 179p for the shares, giving a potential gain of about a third.

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.

It is not too late to sign up to the competition and be in with a chance to win the £ 1,000 weekly prizes or £ 5,000 jackpot. Just visit telegraph. co.uk/ fantasy-fund.