While some investors have soured on financial stocks, Mario Gabelli, founder of Gamco Investors, isn't one of them.
He likes Legg Mason, Janus Capital Group, T. Rowe Price, State Street, Northern Trust and Bank of New York Mellon.
Interest rates will likely rise faster than expected this year, boosting banks' net interest margins,
Gabelli told CNBC. He particularly favors trust banks, "because they've done a fabulous job and are more conservative about how they invest their assets to get a higher current return."
As for Bank of New York, "first of all the fundamentals are good," Gabelli said. Then activist investor Nelson Peltz "comes along and gives you a little extra tailwind. You've got a $40 billion market cap. A lot can be done there." The bank added Peltz to its board last month.
Meanwhile, both Bank of America and JPMorgan Chase reported earnings declines for the fourth quarter — 6.6 percent for JPMorgan and 11 percent for BofA. Declining revenue for fixed-income trading helped spark the drop.
"Trading wasn't great in the quarter," Mike Mattioli, an analyst at John Hancock Asset Management, told
Bloomberg. "Everybody thinks volatility helps trading, but in the short term, banks were out of position."
The CBOE Volatility Index (VIX) rose 18 percent last quarter.
As for JPMorgan it continues to suffer from legal expenses, and its CEO Jamie Dimon took a swing at government regulators and prosecutors Wednesday.
"Banks are under assault," he told reporters, according to
The New York Times. "You all should ask the question, 'How American that is? How fair that is?'"
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