Barron's: Time to swoop down on financials?

Richard Pzena, the founder and co-chief investment officer of Pzena Investment Management (NYSE: PZN), is a top-notch value investor.

He knows that a long-term philosophy is the best approach. That is, it's never easy to invest in troubled companies -- and to get the timing right (actually, Pzena had a particularly tough year in 2007). But the rewards can ultimately be very satisfying.

Interestingly enough, Pzena's also an expert on financial stocks. And, yes, he thinks there are big-time opportunities in the sector (this is according to a piece in Barron's, which is a paid publication).

So what does he like? Well, he's bullish on Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Basically, he thinks both companies will be the main beneficiaries of the mortgage collapse. He believes that the recent losses have been the results of accounting -- not real cash losses. Keep in mind that these companies had little trouble raising large amounts of capital.

Pzena is also a fan of Citigroup (NYSE: C). After all, the company has a diversified global platform. For example, in the emerging markets, there should be lots of growth opportunities (such as with credit cards and consumer loans).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.