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Analyst says bank stocks are overvalued

The S&P financial sector has gained 17 percent since the U.S. presidential election, but bank stocks have taken a more than 1 percent slide lower in the last three days.
On CNBC's "Power Lunch," Charlie Bobrinskoy, vice chairman and head of investment group at Ariel Investments, said investors have jumped into the financial sector on hopes of deregulation too fast.
"There is going to be deregulation. It is going to improve earnings and interest rates are going to go up," Bobrinskoy said, "but all of that, at this point, is over-factored into the stock."

A trader works on the floor of the New York Stock Exchange (NYSE).
Lucas Jackson | Reuters
A trader works on the floor of the New York Stock Exchange (NYSE).

He said the shift into the sector, which was once under-owned by investors, happened after many political and global surprises increased the market's confidence in financials.

"All of a sudden Europe is not nearly in the bad shape it looked like it was, Mr. Trump is clearly very positive from a regulatory point of view, and the Republicans held the Senate and Mrs. Warren is not in charge of the financial committee, so things are just a lot better than they look last year," Bobrinskoy said. "Financials have gone from being very cheap — almost universally last year — to being generally over expensive, worth more than their intrinsic value."

Watch: Pro says stay long banks