Shares of Interactive Brokers (IBKR - Get Report) are down 14% thus far in 2016, but the electronic broker and market maker will see its fortunes turn around as it captures market share from its larger rivals, said Jim Sanford, portfolio manager at Sag Harbor Advisors.

"Interactive Brokers should steal more and more market share from Fidelity and TD Ameritrade as more savvy investors and fee-only advisors become cognizant of its superior technology and lower fees," said Sanford.

Interactive Brokers Group on Tuesday reported second-quarter net income of $27 million, or 40 cents per share, on revenue of $369 million. The results surpassed Wall Street expectations of 35 cents a share.

Sanford is also bullish on Charles Schwab (SCHW - Get Report) , down 16% year-to-date, saying it has "significant room to grow assets." Earlier this week, the brokerage company posted second quarter earnings of 30 cents a share, which matched analysts' projections. Revenue rose 17% to $1.83 billion from last year and was slightly above Wall Street's estimates of $1.8 billion.

Schwab also said it added 271,000 brokerage accounts during the period versus 280,000 last year. The company now has 10 million active brokerage accounts compared to 9.6 million a year ago.

Bank of New York Mellon (BK - Get Report) , down 4% thus far in 2016, is another one of Sanford's favorite financial stocks. Sanford likes the fact that it does not face the balance sheet risks of a traditional dealer or bank lender.

"Bank of New York is the largest custodian of ETFs and this business will continue to surge as millennials engage in more indexed, passive investing," said Sanford.

Finally, Sanford is a fan of BlackRock (BLK - Get Report) , up 5% so far in 2016, primarily due to its growing iShares brand of ETFs.

"BlackRock is the largest issuer and manager of passive, low cost ETFs and closed-end funds," said Sanford. "This business will continue to grow as millennials move away from high fee, high cost and commission-oriented active management."