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Clough Capital Partners, managed by Charles Clough, is nicely diversified with stocks from the financial, technology, healthcare and consumer goods sectors, according to the latest 13F filing with the SEC. Let’s take a look at the top five picks of the $5 billion hedge fund.
Number one is banking giant Bank of America Corp (NYSE:BAC). Trading in Bank of America this year is not for the faint-hearted, as the stock has gyrated between $11 and $12 per share in very active trading. Fortunately for the bulls, there are enough positives fundamentally to keep the bears at bay. For starters, Bank of America Corp (NYSE:BAC) is priced fairly cheap compared to the rest of the banking sector, valued at a mere 60% of book value parity versus an industry average around 100%. Merrill Lynch has also surpassed Goldman Sachs and JP Morgan in investment banking activity this year, and the housing market improvement—and subsequent need for mortgages—will have the expected impact on Bank of America Corp (NYSE:BAC)’s bottom line. However, the stock is looking technically vulnerable above the $12.50 mark, as it continues to succumb to profit taking at each test of this level.
At number two is Google Inc (NASDAQ:GOOG). Clough Capital increased its position in Google by 25% during the fourth quarter for very good reason. With the impending release of the Samsung Galaxy S IV and a recent endorsement from IDC—which expects Android to power more tablets than Apple Inc. (NASDAQ:AAPL)—the outlook for Google Inc (NASDAQ:GOOG) is unmistakably bullish.
Shares of the tech giant are not only outperforming both the S&P and NASDAQ, but also their closest competitors: Yahoo! Inc. (NASDAQ:YHOO), Microsoft Corporation (NASDAQ:MSFT) and Apple. The next target for Google Inc (NASDAQ:GOOG) is $850—technical resistance—but analysts are looking for a test of $1,000 by the end of the year.
Coming in at number three is Citigroup Inc. (NYSE:C). After increasing his position in Citigroup for most of last year, Clough has cut 32% off his portfolio…why may this have been the case?