Incredible opportunity in one sector: Pro

Energy stocks hold some incredible potential, top value investor Rich Pzena said Tuesday.

"I think the integrated oil stocks are selling for the lowest valuations they've sold for in my lifetime, and that's pretty long. The reasons are pretty straightforward. The big oil companies have spent a lot of money over the last five or six years, and very little to show for it," he said. "Oil prices are weakening. The strong demand story we had seven, eight years ago is gone, and so they've gotten very, very cheap. The question is: Are they going to up? I think the answer is yes."

On CNBC's "Halftime Report," Pzena said that his favorite picks included Royal Dutch Shell, BP and Exxon Mobil.

BP had some "hair on it" because of its liability in the 2010 Gulf of Mexico spill and Russian exposure, Pzena said. "But those things pale in comparison to the massive size of their worldwide oil and gas reserve base that you're just getting at single-digit multiples of current earnings."

Pzena, who oversees $27 billion in assets as founder and co-chief investment officer of Pzena Investment Management, counts Royal Dutch Shell, BP and Exxon Mobile among his top holdings.

Rich Pzena, founder & Co-CIO Pzena Investment Management.
Adam Jeffery | CNBC
Rich Pzena, founder & Co-CIO Pzena Investment Management.

Banks were also an attractive sector, Pzena said.

"I actually think the banks today are almost a no-brainer," he said. "All the bad news is priced into these companies."

Banks are likely to benefit as interest rates eventually rise and banks dispose of bad loans from the financial crisis, Pzena said.

"If those things correct, you could have earnings that are something close to double what the banks are currently earning. And if that doesn't happen and we muddle along in the current environment, you're buying the big banks at less than their book values, and they're earning 8 percent or so return on those book values. And the book is about as safe as it's ever been," he said. "So, we have: The downside is you collect 8 percent a year, and the upside is that you double your money."

Read MoreThese bank stocks could double: Rich Pzena

Pzena took issue with high-flying social media stocks.

"We're getting out of the realm that makes any sense for a value investor," he said. "My attitude is: If you're paying 30, 40, 50-plus times earnings, what you have to believe to make it work out is so outrageous that to broadly invest in this category is very tough to do."

Pzena doesn't expect things to shake out for most investors in the space.

"There's going to be more losers than winners," he said.

Pzena, who is a major shareholder of Hewlett-Packard, also weighed in on its decision to split into two companies.

Read MoreSplit shows turnaround a success: HP CEO Whitman

"I think the move makes sense for two or three reasons," he said. "One is it just highlights how extremely distorted the valuation of Hewlett-Packard is because you could take their comps in any subsectors they play in, and you can't find a company with a multiple as low as Hewlett-Packard."

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