After turning out some of the best performers in 2012, investors would be forgiven for thinking that the banking sector didn't have any room left to run. Some may want to avoid the sector all together after their disastrous last few years.
Both groups would be wrong to write off finance stocks today. As Austin points out, even after big returns this year, these companies trade at enormous discounts to their book value. Even if many do not eventually return to their historic ratios, even climbing halfway back to their long-term averages spell big gains for many investors.
The Motley Fool owns shares of American International Group, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo and has the following options: long JAN 2014 $25.00 calls on American International Group. Motley Fool newsletter services recommend American International Group and Wells Fargo. Try any of our Foolish newsletter services free for 30 days.
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