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Charles I. Clough is the founder of Clough Capital Partners, which reported $4.7 Billion total assets in its last 13F filing. Clough graduated from Boston College with a B.A. degree and received his M.B.A. from University of Chicago.

Clough launched Clough Capital Partners in 2000 after working as a Chief Investment Strategist for 13 years at Merrill Lynch. Clough was responsible for directing the global investment strategy research effort at Merrill Lynch. Clough has been selected to the Institutional Investor All-America Research Team for 12 consecutive years. He is also one of the top strategists in areas such as US equities, global investments and fixed income.

According to 13F filings, Clough Capital Partners had 207 securities in its 13F portfolio as of March 31, 2011. We noticed that Clough has been holding Microsoft Corp (NASDAQ:MSFT), Peabody Energy Corp (NYSE:BTU), Anadarko Pete Corp (NYSE:APC), Golar Lng Ltd Bermuda (NASDAQ:GLNG), Arch Coal Inc (NYSE:ACI) and Consol Energy Inc (NYSE:CNX) during last five years. In the first quarter of 2011, he sold 58 securities and bought 59 new securities.

During the first quarter of 2011, Clough bought $391 million worth of put options on iShares Russell 2000 Index fund (IWM). He also invested $48 million in Marathon Oil Corp (NYSE:MRO) and $37 million in iShares FTSE China 25 Index Fund (FXI) during the first quarter of 2011.

Charles Clough also increased some of his holdings significantly. He bet big on Goodyear (NASDAQ:GT) by increasing his holdings to $83 million at the end of March. He also increased his Google (NASDAQ:GOOG) position to $80 million by buying 39,007 shares during the first quarter of 2011. He sold out his holdings in First Trust NASDAQ-100 ex-Tech Sec Idx Fund (NASDAQ:QQXT), SPDR S&P Homebuilders Fund (XHB) and BP Plc (NYSE:BP) during the first quarter of 2011.

In a recent article we showed that Clough's largest long term holdings have gained 25.1% since March 2006, outperforming the S&P 500's (NYSEARCA:SPY) 11.7% return. We updated our table with latest 13F data and we found that Clough's largest stock holdings have lost 3.7% since the end of first quarter 2011, vs. a 0.8% gain for the SPY. We think that this constitutes a buy change for his imitators who would like to construct his top holdings.

Here is how Clough’s top picks performed since the end of March 2011 (Our list does not include bonds and put options):

Stock

Value
(Millions)

Return
Since Mar 31,2011

MICROSOFT CORP (MSFT)

162.5

-2.9%

GOODYEAR TIRE & RUBR CO (GT)

83.0

17.3%

GOOGLE INC (GOOG)

80.4

-10.7%

INTERNATIONAL BUSINESS MACHS (NYSE:IBM)

68.9

4.8%

CITIGROUP INC (NYSE:C)

60.1

-7.2%

BANK OF AMERICA CORPORATION (NYSE:BAC)

59.6

-13.1%

NATIONAL GRID PLC (NYSE:NGG)

55.1

7.1%

VERIZON COMMUNICATIONS INC (NYSE:VZ)

52.3

-3.6%

SPDR GOLD TRUST (NYSEARCA:GLD)

48.3

5.8%

MARATHON OIL CORP (MRO)

47.8

-3.5%

NATIONAL OILWELL VARCO INC (NYSE:NOV)

44.4

-14.5%

CAMERON INTERNATIONAL CORP (NYSE:CAM)

44.3

-15.7%

BAKER HUGHES INC (NYSE:BHI)

43.6

-4.3%

TRANSDIGM GROUP INC (NYSE:TDG)

40.8

-1.8%

HATTERAS FINL CORP (NYSE:HTS)

39.6

2.4%

HARTFORD FINL SVCS GROUP INC (NYSE:HIG)

39.4

0.6%

COOPER TIRE & RUBR CO (NYSE:CTB)

38.0

-8.1%

ISHARES TR (NYSEARCA:FXI)

37.0

-2.0%

INTEROIL CORP (NYSE:IOC)

36.5

-20.3%

ALPHA NATURAL RESOURCES INC (NYSE:ANR)

34.9

-15.7%

SOLAR CAP LTD (NASDAQ:SLRC)

34.5

4.1%

GENWORTH FINL INC (NYSE:GNW)

32.8

-17.4%

MGIC INVT CORP WIS (NYSE:MTG)

30.9

-16.2%

ARES CAP CORP (NASDAQ:ARCC)

30.7

-0.7%

OWENS ILL INC (NYSE:OI)

30.6

5.4%

PEABODY ENERGY CORP (BTU)

29.9

-18.2%

TENNECO INC (NYSE:TEN)

28.8

-5.5%

ANNALY CAP MGMT INC (NYSE:NLY)

28.5

3.2%

ANADARKO PETE CORP (APC)

26.9

-9.0%

PENNANTPARK INVT CORP (NASDAQ:PNNT)

25.8

0.2%

Value Weighted Return

1415.9

-3.7%

SPY

N/A

0.8%

Clough's largest stock holdings have lost 3.7% since the end of first quarter 2011, vs. a 0.8% gain for the SPY. Microsoft was Clough's biggest investment at the end of March 2011. MSFT has lost 2.9% since then, underperforming the SPY’s 0.8% return. Clough has $162 million invested in MSFT. Whitney Tilson was also extremely bullish about Microsoft in his 2010 yearend letter to investors. Tilson expected Microsoft to reach $35. Here is what he said about Microsoft back then:

Microsoft reported spectacular earnings in late October, handily beating analysts’ estimates, yet the stock has barely moved so we’d added to our position.

Adjusting for the deferral of Windows 7 revenues last year, Microsoft reported revenue, EPS, bookings, and operating cash flow growth of 13%, 19%, 24%, and 34%, respectively. The company’s results were strong across the board, riding a wave driven by its three main profit drivers, Windows, Office, and Server & Tools.

Goodyear Tire & Rubber was Clough's second biggest investment at the end of March 2011. GT has gained 17.3% since then, outperforming the SPY by a large margin. Clough increased his GT shares by 63% during the first quarter of 2011. Clough has $83 million invested in GT. David Tepper’s Appaloosa was also bullish about GT at the end of 2010.

Marathon Oil Corp was Clough's biggest new investment at the end of March 2011. MRO has lost 3.5% since March, underperforming the SPY by 4.3 percentage points. Clough had nearly $48 million invested at the end of March. MRO recently traded at $51.2 and has a 1.9% dividend yield. The stock has a market cap of $36.5 billion and P/E ratio of 11.7. MRO is one of the top 30 stocks that are expected to beat the S&P 500 by three percentage points.

Google Inc has lost 10.7% since March, underperforming the SPY by 11.5 percentage points. Clough increased his GOOG shares by 40% during the first quarter of 2011. Clough had nearly $80 million invested at the end of March. GOOG recently traded at $524.3. The stock has a market cap of $169 billion and P/E ratio of 20.3. A whopping 156 hedge funds owned Google at the end of last year. They spent $1.6 Billion during the fourth quarter. Lee Ainslie’s Maverick, Roberto Mignone’s Bridger Management, Jim Simons’ Renaissance and Jonathan Auerbach’s Hound Partners are other hedge funds that are bullish about Google at the end of 2010. Viking Global’s Andreas Halvorsen sold out his GOOG shares during the first quarter of 2011.

Citigroup has lost 7.2% since March, underperforming the SPY by 8 percentage points. Carlson increased his exposure by 97% in the first quarter. Clough had nearly $60.1 million invested at the end of March. Citigroup is one of the favor stocks that hedge funds and analysts love.

Source: Charles Clough's Favorite Stock Picks