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Massocca: Don't invest in banks just yet

Taking money from ATM
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The chief investment officer of Wedbush Equity Management told CNBC on Friday that it is the regulatory environment that is favoring banks right now.

CIO Steve Massocca told CNBC's Power Lunch that "in terms of calling bank growth, I just don't think that's the story. I think the story with banks is really the change in the regulatory environment."

The KBE rose 19 percent since Trump's election in early November — November being the best month in bank history.

Considering that, as it stands, the forward PE of the tech ETF and the forward PE of the financial ETF are almost the same, if given the choice between investing in the tech sector or in the bank sector, Massocca said, "I certainly wouldn't choose the bank sector here right now. I think it's certainly overbought from a technical standpoint."

Massocca tells CNBC that the environment for banks is going to improve. The Trump administration will likely be "much more facilitating to banks than the Obama administration has been." Banks can also expect expanded net interest margins as the Fed continues to raise interest rates, and investors should hold off if they are interested in buying bank stocks, he added.

When it comes to tech investment, he advises investors to "stay away from the FANG stocks, the stocks that have incredibly high multiples," leaning instead toward the "larger cap, older tech names" like Seagate, which have high yields and low multiples and are continuing to develop their technologies.