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B.A. from Boston College, M.B.A. from University of Chicago, 13 years of experience as the Chief Investment Strategist at Merrill Lynch, been selected to the Institutional Investor All-America Research Team for 12 consecutive years. Charles Clough, founder of Clough Capital Partners, has an amazing background. He acquired strong academic knowledge in investments from two great institutions and gained valuable experience on Wall Street, where he was responsible for directing the global investment strategy research at Merrill Lynch. As one of the top strategists in areas including U.S. equities, global investments and fixed income, Charles Clough seems to be worth following. Let’s take a look at the recent performance of his Clough Capital Partners to check out whether this is true.

Top 20 positions in Clough’s portfolio at the end of September:

Company Name

Ticker

Value

Activity

ISHARES TRUST Put

IVV

520453

-5%

ISHARES TRUST Put

IWM

194186

New

MICROSOFT CORP Call

MSFT

97788

-1%

CATERPILLAR INC Put

CAT

89346

New

POWERSHARES QQQ TRUST Put

QQQ

85034

New

MICROSOFT CORP

MSFT

80508

4%

APPLE INC

AAPL

73022

3%

NATIONAL GRID PLC

NGG

68217

2%

GOODYEAR TIRE & RUBR CO

GT

56555

-7%

MARKET VECTORS E T F TRUST

GDX

48797

12584%

ARES CAPITAL CORP

ARCC

41725

64%

HATTERAS FINANCIAL CORP

HTS

39492

-7%

TRANSDIGM GROUP INC

TDG

38563

-28%

SOLAR CAPITAL LTD

SLRC

35301

4%

INTL BUSINESS MACHS

IBM

34163

3%

ISHARES TRUST

HYG

33659

144%

SPDR GOLD TRUST

GLD

33069

810%

GOOGLE INC

GOOG

32246

4%

NATIONAL OILWELL VARCO

NOV

30678

-36%

CITIGROUP INC

C

29453

-28%

Clough reduced the value of his portfolio from $3.6 billion at the end of June to $3.0 billion at the end of September. He also slightly reduced the number of different positions in his portfolio from 185 to 182. He bought some new positions and he also sold out many positions. For instance, Clough reported to own $32.6 million worth of U.S. Airways Group Inc (LCC) at the end of June, but did not disclose owning any shares of LCC at the end of September. Since September 30, LCC was down 26.91%, while SPY returned 2.82% in the same period. In addition to LCC, Clough also sold out his stakes in Marathon Oil Corp (MRO), TRW Automotive Holdings Corp (TRW), Hartford Financial Services Group Inc (HIG), Tenneco Inc (TEN), Invesco Mortgage Capital Inc (IVR), and Petrohawk Energy Corp (HK).

On the other hand, Clough also opened a few new positions. For example, he initiated a brand new $25 million in Oil Service Holdings Trust Call (OIH). OIH returned 9.75% so far since the end of September, indicating that Clough made about 8% from this new position. Jeffrey Vinik and George Soros were also bullish about OIH. In addition to OIH Call, Clough bought new stakes in BP Plc (BP). He reported to own $23 million worth of the stock at the end of September. BP gained 10.33% since the end of the third quarter, beating the market by 7.5%. Eric Mindich also had over $200 million invested in BP. Clough also bought new stakes in Apollo Investment Corp (AINV), Goldcorp Inc (GG), and a few put options including iShares Trust (IWM) and Caterpillar (CAT).

During the third quarter, Clough largely increased his position in Market Vectors ETF Trust (GDX) by 12584%. Clough disclosed to own $49 million of GDX at the end of the third quarter. However, GDX lost 0.72% since the end of September. Clough also increased his stakes in Ares Capital Corp (ARCC) by 64% to $42 million. ARCC gained 3.49% so far in the fourth quarter, beating the 2.82% of SPY in the same period.

We like Clough. His insights on the Fed and his experience on the Street are invaluable to his Clough Partners. In the third quarter, Clough made some smart decisions, such as selling all his stakes in LCC and opening new positions in OIH and BP. We encourage investors to imitate Clough’s top picks and we believe that they will be able to outperform the market by doing so.

Source: Charles Clough's Top Stock Picks