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Financial and Tech stocks have regained their shine back for the investors. All thanks to the ongoing recovery in the U.S. economy. Many investment firms have started focusing back on these stocks and the same was evident from the recent 13F filings. Whenever I search for a new investment, I always try to look at what the fund managers are betting upon. My ideology behind choosing any pick from Investment firm's portfolio is plain - "Who's got the skin in the game?"

My all-time favorite among them being Fisher as well as Stone Ridge. If you are interested in reading my choices from Fisher's portfolio you can find them here, whereas StoneRidge is covered over here.

On the other side, while deciding a stock pick on financial or tech stocks, I always look at what Eqis Capital Management is buying. This investment firm has around 85% of its portfolio in financial stocks and the second preference of the firm lies in Technology. In this article, I have picked up my three favorite stocks from Eqis's recent additions. The stock prices of these three companies are on a recovery and their strong fundamentals are intact to drive future earnings. Let's discuss each of these stocks in detail.

Nokia Corporation (NYSE:NOK)

A Little sunshine after the storm

After hitting a record low of ~$1.69 in July 2012, Nokia's stock price seems to be getting its momentum back with around ~59% returns in the last six months. The company has been able to woo its investors by its Lumia range of phones, which have been widely accepted in the market. Nokia recently reported its 4Q12 earnings beating the analysts' estimates. The company finally posted an operating profit of ~$584 million after billions of losses in the last six quarters. The profits were mainly supported by the sales of Lumia, which stood at ~4.4 million smartphones as compared with ~2.9 million units in 3Q12. The company's improving gross margin was another positive for its results, which was at ~18% for the Smart devices much ahead of the consensus estimate of ~11%. I feel Nokia's turnaround strategy has started generating the financial gains for the company, which was reflected in the results.

What lies ahead?

Windows-based phones have started gaining acceptance with shipments increasing by around 36% globally in the first nine months of 2012. Nokia's deal with Microsoft for the windows-based phone was a perfect step to pull-back its lost market share in the industry. Nokia will get ~$1 billion from Microsoft for a period of five years, for the promotional activities of windows-based phones. This payment will help Nokia to cover its marketing expenses and will also give a boost to its financial position in the future.

Along with this, Nokia is also aggressively moving toward its cost-cutting targets to support its bottom line growth. As part of this strategy, the company has announced to cut down 10000 positions globally in 2013. It has also decided to retrench another 300 employees from its IT division and is outsourcing about 800 jobs to external organizations such as HCL and TCS. These initiatives will cost ~$1.26 billion as restructuring charges, but will also help the company in saving ~$3 billion per annum in its core devices segment.

Cisco Systems (NASDAQ:CSCO)

Another pick from Eqis's portfolio is the networking giant Cisco. Its stock has seen a downfall to ~$16.82 in November 2012, but has rebound with an increase of ~27% since then. The uptrend was mainly supported by its better-than-expected 1Q13 results with a strong order growth in the U.S. Most recently, the company has decided to sell off its Linksys home networking group to a privately held company, Belkin. This divestiture followed last year's shut down of its video camera unit Flip. These moves by the company clearly indicate that it wants to get rid of all its consumer businesses and focus mainly on its services and solutions for enterprises. Additionally, as the Linksys was a lower-margin segment for Cisco, this shedding will help the company with a gross margin improvement of ~25 bps.

Another interesting factor about Cisco is its continuous focus on the M&A strategy. It has been very aggressive on acquisitions in 2012 to expand its markets as per the technology demands. Its two acquisitions of Cloupia and Meraki were aimed to broaden its base in the cloud-based offerings. Another acquisition of Cariden Technologies was to gain an edge in the SDN offerings for its core providers. To continue with the same trend, Cisco recently announced its acquisition of the Israeli wireless technology company Intucell for ~$475 million. Via this acquisition, the company would enter SON (self organizing network) management software in an effort to gain from new sources of growth. This technology will also help Cisco to generate more revenue from the wireless carriers such as AT&T, which are using this to manage their networks in a better way. The deal is expected to close in April 2013 and will strengthen Cisco's base in next-gen mobile networks. It will further help Cisco to gain a competitive edge over Ericsson, Huawei and Nokia Siemens Networks. I believe Cisco's recent acquisitions are the right step to refocus its business aiming toward high ROE.

Wells Fargo & Company (NYSE:WFC)

Last month, Wells Fargo reported its 4Q12 results, which were overall strong depicting the recovery of the company after the financial crisis. The company posted an EPS of ~$0.91, which was higher than the consensus estimate of $0.87 and even 25% higher than the last year's same-quarter EPS of $0.73. It reported earnings of ~$4.9 billion, which increased by ~25% y/y. Wells Fargo witnessed another quarter with a strong balance sheet growth. Its total loans increased by ~$16.9 billion in the quarter, which included ~$9.7 billion growth in mortgages. The impressive mortgage banking results were mainly due to the company's increased focus on the high-margin retail business. Mortgage banking represents around 30% of the company's operating fee revenue. The company's strong refinance volumes due to the lower rates and HARP (Home Affordable Refinance Program) 2.0 will definitely help the company to continue the mortgage growth in 2013.

The company has remained focused on reducing its expense base by improving the efficiency ratio. In the year 2012, project compass - the cost cutting program - helped it in achieving ~$1.5 billion of expense cuts. This resulted in an efficiency ratio of ~56% in 4Q12. Wells Fargo has ~$125 million of quarterly expenses related to mortgages foreclosure review scheduled for 1Q13. Following which I expect its efficiency ratio to be in the range of 55%-59% for 2013.

The Investing opportunity

Nokia - On the whole, I believe the cost-cutting initiatives will help the company to achieve operational efficiency in 2013. Moving over to the long-term returns, Nokia is well placed with its portfolio of windows-based smartphones. Further innovations will definitely help the company to gain more market share in the industry.

Cisco - I remain bullish on Cisco's stock with its shifting focus on the enterprises business and software solutions. Also, the divestitures of under-performing units will help to further enhance its core offerings in the industry.

Wells Fargo - the company's strong best-in-class balance sheet, solid quarter results could drive an upside for the stock. I expect it to return around $11 billion to its shareholders in 2013 with ~35% y/y increase in the share buyback.

I recommend a buy on all three stocks.

Source: 3 Buys You Will Never Regret