Don't Fear Every Financial Stock

Not only that, but financials have been beaten down so indiscriminately over the past couple of quarters that it's a value investor's smorgasbord right now.

Just look at Premier Financial Bancorp (PFBI Quote). The micro-cap banking company is down around 17%, since the end of August, on "terrible" news like increased dividends and higher quarterly earnings.

What?

That's right. The stock's currently trading around $8, with a P/E around 6. But PFB's tiny size has meant that they've been thrown around by the waves that have been rippling in the financial world lately.

BancTrust Financial Group (BTFG Quote) was a similar value story until investors caught on in September and sent the high-performing stock on a huge double-digit jump.

There are other interesting financials out there too. Cheung Kong Holdings (CHEUY Quote) is an investment holding company based in Hong Kong that sports a strong balance sheet and impressive earnings growth -- a 53% increase from 2006 to 2007.

But just because there are attractive financial plays out there, doesn't mean that old investment favorites like financial ETFs or index funds are a good idea in 2008. In fact, they're not. They tend to be weighted towards the big financials that I'm not crazy about right now. (Don't miss "Take a Pass on Passive Index Investing")