Despite negative sentiment, I'm still bullish on financials, expert says

Key Points
  • Financials were a popular postelection trade but they wiped out their gains for the year on Wednesday.
  • David Ellison thinks the reason to own them are still there.
  • He sees good fundamentals and reasonable valuations for a lot of the companies.
Financial stocks fall: Time to buy the banks?

Financial stocks may have wiped out their gains for the year, but despite the negative sentiment, David Ellison told CNBC on Wednesday he's still bullish on the sector.

Financials were once the most popular postelection trades. However, on Wednesday, the S&P SPDR Financial Select Sector ETF (XLF) turned negative for the year as investors grew wary about President Donald Trump's domestic and foreign policies.

"The reason to own them is still there. You've got a good economy. Credit's good. The prime has moved up 75 basis points in the last year," the portfolio manager of Hennessy Large Cap Financial Fund said in an interview with "Closing Bell."

Therefore, Ellison sees a buying opportunity as the sector moves to somewhere in between now and its postelection run-up.

"The fundamentals are good. The valuations are reasonable for a lot of the companies."

He specifically likes names such as Bank of America, PNC Financial and East West Bancorp.

However, analyst Dick Bove told CNBC earlier Wednesday banks are a "very treacherous area" to invest in and investors should get out now.

Earnings seasons gets into full swing this week, with JPMorgan, Citigroup and Wells Fargo set to report earnings on Thursday.

—CNBC's Fred Imbert contributed to this report.

Disclosures: Bank of America, PNC Financial and East West Bancorp are in the Hennessy Large Cap Financial Fund