The recent market sell-off could provide a compelling entry point for investors in financial stocks, especially banks, according to longtime value investor Bill Nygren. Stocks recovered a fraction of their recent losses in midday trading on Wednesday, after three weeks of declines. The rebound followed the release of a softer-than-expected consumer price index report for February . Still, the S & P 500 remains almost 3% lower for the week, putting the market on pace for a fourth straight week in the red. “Financials are still the largest opportunity set, and we own a lot of them, especially the banks,” the long-time portfolio manager at Oakmark Funds told CNBC’s ” Money Movers ” on Wednesday. “Most of them are at single-digit [price-to-earnings] multiples. Almost all of them are repurchasing a lot of stock.” Nygren particularly likes Ralleigh, N.C.-based First Citizens BancShares , saying it has a “core competency in assimilating value accretive acquisitions.” “They were the buyer of SVB from the FDIC that significantly increased per share book value, and we think under the new administration, it’s more likely that they might be able to put that skill set to better use,” Nygren said, referring to the sale of Silicon Valley Bank assets after its failure in March 2023. Shares of First Citizens have fallen nearly 18% over the past month, far underperforming the broader market. The S & P 500 financials sector index has dropped more than 7% lower in the same period. Outside of financials, Nygren pointed to General Motors – which has declined almost 11% year to date – as another stock he likes, despite the recent tariff uncertainty between the U.S. and Canada. Last Wednesday, President Donald Trump announced a one-month tariff exemption for North American automakers following his move to impose 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on Chinese goods. Along with GM, that exemption – which lasts until April 2 – applies to Ford and Chrysler/Jeep parent Stellantis . “We’re never trying to outguess what a company’s going to earn in the next quarter – we’re looking out five to seven years, and when we look at that time frame, tariffs will not be a major issue,” Nygren said. He also praised GM’s stock buybacks over the past year and a half, along with a recent 25% increase in its quarterly dividend to 15 cents per share . “This is just a massive change for GM,” said the investor, who joined Harris | Oakmark in 1983. “We think this pivot to returning capital to shareholders through repurchase will dramatically change the trajectory of GM’s share price.” As for the “Magnificent Seven” stocks – whose sell-off helped lead the market Monday and Tuesday – Nygren pointed out that the premium needed to own is “still just as high as it’s been.” Of the seven, he only owns Google- and YouTube parent Alphabet , and believes that “paying a low-teens multiple for the search business is quite attractive.” While Alphabet shares were slightly higher Wednesday, the stock has fallen more than 4% week-to-date and almost 10% in the past month. By comparison, the CNBC Magnificent 7 Index has shed nearly 6% in the past week and about 12.5% in the past month.
