The following video is part of our "Motley Fool Conversations" series, in which consumer goods editor and analyst Austin Smith discusses topics across the investing world.

Despite a big run up so far in 2012, the banking sector is looking incredibly cheap today. Price to book values are still about one-quarter their historic levels. The nice thing about warrants is that, like an option, they give you the choice to buy a stock at a predetermined price in the future. In the case of Citigroup warrants, that price is $10.61 by Dec. 31, 2018. As a risk-averse investor, I like the idea of paying a small amount of money today to buy higher-priced Citigroup shares in the future. While banking still looks cheap, the sector's balance sheets could still hold share price-destroying land mines in the future.

To read about another, lesser known company that looks like a steal today, check out our report: "The Motley Fool's Top Stock for 2012." In it you'll learn about a company that's still flying under Wall-Street's radar. Click here to learn more.

Austin Smith owns shares of Wells Fargo & Company and warrants on Citigroup. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase & Co., and Wells Fargo & Company. The Motley Fool has the following options: short APR 2012 $21.00 puts on Wells Fargo & Company, short APR 2012 $29.00 calls on Wells Fargo & Company, short OCT 2012 $33.00 puts on Wells Fargo & Company, and short OCT 2012 $36.00 calls on Wells Fargo & Company. Motley Fool newsletter services recommend Wells Fargo & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.