In his Stellar Stocks Alert, newsletter advisor Richard Schmidt sees long-term opportunity in select brokerage stocks. Here, he looks at Charles Schwab (NASDAQ: SCHW) and E*Trade (NASDAQ: ETFC).

"Some of the strongest financials in the world have lost 60%, 70%, even up to 90% or more of their value in the last year. Shares of Charles Schwab have come down too. But the stock has lost less than 50%, at its worst.

"Most of that has come since October. We had hoped the stock would bottom. But the stock continued to drop through support, meaning the downtrend is still in place. We may eventually see it go down by more than 50%.

"We continue to apply our value-oriented principles in selecting new growth stocks as we look for companies with superior profitability and strong balance sheets," says Jim Stack.

In his InvesTech Market Analyst, he and analyst Bruce Morison explain, "Our latest featured investment, Charles Schwab Corp. (NASDAQ: SCHW), is a prime example and stands out as a conservative way to access to opportunities in the battered financial group."

"We are increasing our equity allocation in stocks that should show strong relative performance in a market upturn.

"We continue, however, to be very selective in terms of quality, as well as downside risk. Over the past 20 years, brokerage/asset management firms have produced more than twice the return of the market following a bear market.

"The Charles Schwab brand is one of the most well-known and trusted names in the financial services industry. Its strategy is to be competitively priced, but more importantly to be positioned as the gold standard in client service and integrity.