NEW YORK ( TheStreet) -- Financial stocks have rallied lately. During the past year, financial funds returned 33.3%, compared with 24.8% for the S&P 500, according to Morningstar. Can the gains continue? Some fund managers think so. They argue that banks have remained undervalued since the financial crisis unnerved investors.Banks typically sell for 80% to 180% of their book value -- the assets minus liabilities. At the depths of the financial crisis, prices dipped to near 50% of book values. Since then, the shares have recovered to 110%. That price appears to be cheap at a time when the S&P 500 commands 220% of book.
A Case for Bank Stocks
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.