According to a survey by Barclays Stockbrokers, investors feel that Tesco is the stock that has the most potential in the UK retail sector.
Tesco remains the most desirable UK retail stock despite the fact that it recently reported its first negative sales figures in twenty years.
Tesco is the third-largest food retailer in the world, and operates in 13 other markets overseas.
The disappointment in UK sales was offset by another rise in profits and positive data from Tesco’s overseas operations.
The top three most desirable stocks were dominated by food and clothing retailers, as Tesco’s rival and grocery giant Sainsbury’s took the number two spot with 18% of investors surveyed preferring it.
Marks and Spencer took third place with 14%.
Analysts say that confidence in Tesco stock is being prompted by last month’s news that investment tycoon Warren Buffett has backed the corporation’s US strategy. It is reported that Buffett, the world’s second richest man, bought 34 million shares of the company for £120 million.
Experts say that Tesco’s international presence gives it an edge, as purchasing it gives investors diversification opportunities that many of its rivals cannot offer.
The Tesco brand has also expanded its branches into banking and telecoms services internationally, helping boost its attractiveness.
Despite the good news for Tesco, Barclays Stockbrokers’ survey reveals that nearly one-third of investors are steering away from the UK retail sector entirely, as it poses too much risk and uncertainty in the current climate.
16% said that they were not interested in investing in the retail sector at all.
However, a spokesperson from Barclays Stockbrokers says that UK retailers have had a good deal to be happy about recently, as a great many can report profit margins this month. The opening of Westfield Stratford City, the largest shopping centre in Europe, is also giving the UK retail sector a boost.