Bet on big banks: 5-star fund manager Bill Nygren

Favorite bank right now is BAC: Nygren

Quarterly earnings from two major banks are painting a messy picture, but a combination of cheap valuations and solid management makes this sector the best place for investors, according to five-star money manager Bill Nygren.

Lingering legal issues and rising interest rates led to a mixed bag of reports for both JPMorgan and Wells Fargo—which kicked off the earnings season for big banks on Tuesday.

JPMorgan said fourth-quarter profit fell 7.3 percent due to lingering legal issues tied to its involvement with convicted Ponzi-schemer, Bernard Madoff.