The winners in this market cycle will be buyers of financial stocks, said Anton Schutz, president at Mendon Capital Advisors.
“If you have time on your hands, Citigroup is a buy,” Schutz told CNBC. “I think the market would absorb that stock really well and it would be a strong signal. A lot of funds are underinvested in financials and they would love the opportunity to buy a big chunk of Citi.”
On Tuesday, a Singapore wealth fund halved its stake in the bank, raising investor concerns over the outlook for global banks. The fund's move coincided with unconfirmed reports that the U.S. government plans to sell part of its 34 percent stake in Citigroup.
“Getting the government out of Citi would generate some confidence,” said Schutz. “The government books a really nice profit on it … it would be a win for capitalism to get the government out of some of these companies.”
Schutz said investors should continue to buy companies with “too much capital” and companies that are buying distressed assets.
He recommended names such as Invesco and Chimera Investments.
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Disclosure:
Schutz owns shares of Chimera Investments.
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