Kass Katch: Buy the Financials. Yes, Buy

This blog post originally appeared on RealMoney Silver on Jan. 14 at 8:05 a.m. EST.

It's been a long, hard road for financial stocks, and no one's been more critical of the group than I have. However, could they be on the mend -- and what's a way to play it?

The Financial Select Sector SPDR(XLF Quote) is a broadly diversified and liquid exchange-traded fund that has exposure to the leading companies in the financial sector.

Top 10 Holdings of the XLF (listed alphabetically):

• American Express (AXP Quote) -- 2.89%
• American International Group (AIG Quote) -- 6.17%
• Bank of America (BAC Quote) -- 8.47%
• Citigroup (C Quote) -- 6.86%
• Goldman Sachs (GS Quote) -- 3.81%
• JPMorgan Chase (JPM Quote) -- 6.39%
• Morgan Stanley (MS Quote) -- 2.30%
• U.S. Bancorp (USB Quote) -- 2.37%
• Wachovia (WB Quote) -- 3.39%
• Wells Fargo (WFC Quote) -- 4.49%

XLF Statistics:

• Average price/earnings ratio = 11.9 times
• Average price/book ratio = 1.46 times
• Average price/revenue ratio = 1.91 times
• Average price/cash flow ratio = 13.7 times

On Thursday and Friday, I covered all of my longstanding shorts in the financial sector. That includes positions in brokerages, banks, mortgage originators and mortgage insurers....