Most Wall Street firms run model portfolios for their institutional and retail clients. Like all portfolios, they make weighting changes based on a variety of specifics that can include everything from valuation to loss or gains in technical and relative strength. Usually when a portfolio manager eliminates a position, either the thesis on the stock has totally broken down or the stock has hit the established price target. Typically when they add new names, they are replacing ones that have been removed. Piper Jaffray recently took a large chunk out of its model portfolio and in the process eliminated some high-profile names.

In reweighting their portfolio, the Piper Jaffray team has looked to not only rebalance the dollar amount that was taken out, but they appear to be overweighting, at least in the current additions, to biotech and pharmaceuticals.

Here are the stocks that recently were added to the Piper Jaffray Model Portfolio.

Concho Resources Inc. (NYSE: CXO) is added to the list and is a top energy play in the Permian Basin in West Texas. The company is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. It also may be a possible takeover candidate. The Thomson/First Call price target for the stock is $130.82. Shares closed Tuesday at $119.

Century Aluminum Co. (NASDAQ: CENX) is perhaps a contrarian addition. The company produces and sells primary aluminum in the United States and Iceland. It offers high-purity primary aluminum, molten aluminum, standard-grade ingots, extrusion billets and other value-added primary aluminum products. The consensus price target is $11.75. The stock closed Tuesday at $11.36.

Equity Residential (NYSE: EQR) is a real estate investment trust (REIT) that engages in the acquisition, development and management of multifamily properties in the United States. As of December 31, 2007, it owned and invested in 579 properties in 24 states and the District of Columbia consisting of 152,821 units. Investors are paid a solid 4.4% distribution. REIT distributions make include return of principal. The consensus price target for the stock is $58.19. Equity Residential closed at $58.79.

Gilead Sciences Inc. (NASDAQ: GILD) is a favorite Wall Street biotech name that was added to the model portfolio. With its successful hepatitis C drug Sovaldi launching and a very strong and impressive oncology pipeline, the company is poised for another outstanding year. The company also continues to innovate in the HIV arena, which grew 11% in 2013. The consensus estimate is $100.17. Gilead closed Tuesday at $83.95.

Eli Lilly & Co. (NYSE: LLY) is a top drug stock to buy on Wall Street. Many analysts see a number of strong catalysts for the stock for the rest of 2014. While some have overfocused on patent expiration and enthusiasm has been muted, firms that are bullish on the company see increased share buybacks as a strong support for the stock. Investors are paid a very solid 3.4% dividend. The consensus price target is $57.24, compared to a Wednesday close of $58.48.

Teva Pharmaceuticals Industries Ltd. (NYSE: TEVA), one of the world’s largest generic drug manufacturers, is well-positioned to take advantage of the high number and dollar amount of branded drugs going off-patent over the next few years. An increased commitment to capital redeployment combined with its low valuation should reward shareholders. Stockholders are paid a 2.40% dividend. The consensus price target for this market leader is $45.79, but Teva closed Tuesday at $48.33.

The Piper Jaffray weighting increase to health care names is understandable. The sector has outperformed all others, with the exception of utilities, so far this year, and it may remain a market leader for the balance of the year. The stocks are also less vulnerable to sharp sell-offs as some are considered defensive.

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