There's a winning strategy to make money investing in banks, according to one of the most followed bank analysts in finance, Dick Bove, Vice President of Equity Research at Rafferty Capital. For Bove, the key lies in buying bank stocks at a specific price-to-book level and then selling them at another specific level.
For a little background, analysts look the book value of the bank's equity because much of a bank's balance sheets consist of liquid assets such as cash or Treasury notes. A "price-to-book" ratio is the ratio of the stock price to the per share value of equity on the balance sheet.
So, what price-to-book levels does Bove think you should buy and sell bank stocks? Watch the accompanying video to get those numbers and to hear one strategy Bove says would have made you money on banks since the financial crisis of 2008.