"Flagstar Bancorp (FBC), the Midwest savings bank that we recommended, as our favorite stock for 2011, remains a buy," says Mark Skousen.

The editor of Forecasts & Strategies explains, "The bank missed expected earnings, losing 74 cents per share, compared to an expected loss of 15 cents per share. But looking at the bigger picture, the news is better than those numbers reflect.

"Flagstar Bancorp technically lost $0.74 per share this year, but that's better than last year's loss of $1.53 per share. Moreover, if you look beyond the one-time charge for the sale of a bad loan portfolio, the per-share loss was only $0.06.

This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.

"My favorite speculative stock idea for 2011 is Flagstar Bancorp (FBC), the Troy, Michigan-based bank with 165 branches in Michigan, Indiana, and Georgia," says Mark Skousen.

The editor of The Hedge Fund Trader explains, "The stock was trading for over $140 a share before the financial crisis; the stock fell to $5 a share last May, and it is now under $1.50.

This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.

"Financials appear to offer among the best opportunities for 2011," says ETF specialist Jim Farrish.

The editor of Sector Exchange explains, "Indeed, my favorite ETF idea for the coming year would be the First Trust Financials AlphaDEX ETF (FXO), a well diversified way to play the sector overall.

"Even among the broad-based market carnage of the past year, regional banks with heavy real estate exposure have been notably poor performers," notes turnaround expert George Putnam.

In The Turnaround Letter, he explains, "While investors are still wary of this group, there are cases where the market has overreacted and the stocks will eventually rebound dramatically." Here, he looks at four favorite regionals.

"Many regional banking stocks are now trading at a small fraction of their 'book value.' In more normal times, most banks will trade for two to three times book value and sometimes more.

The level of bad loans at US banks is getting worse and not better. According to the FT, "Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, said it was likely loan-loss provisions and bank failures would rise in coming quarters as the fallout from market turmoil hits the real economy."

Three banks have failed this year and the FDIC says the number of "problem" banks sits at 90.

All of this may be tough on regulators who may have to bail banks out, but it could be tougher on shareholders who have stock in mid-sized and regional banks. NCC (NYSE:NCC) has already had to raise $7 billion. Its shares are down to $5.68 from a 52-week high of $35.83. Other banks in the same category, such as Fifth Third (NASDAQ:FITB) and KeyCorp (NYSE:KEY), have lost about half their price compared to 52-week highs.

The news from the FDIC shows that investing in financial firms remains tricky and dangerous. It is not for the faint of heart.

Douglas A. McIntyre is an editor at 247wallst.com.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"For more conservative investors, my favorite idea for 2008 is First Horizon National Corp. (NYSE: FHN), the Tennessee-based holding company for First Tennessee Bank," says Keith Fitz-Gerald, editor of Money Morning.

"Its banks feature all the offerings you might expect from a good regional bank: Savings, checking, mortgages, investment banking, and brokerage services. It's not exactly an innovative idea -- minimize risks and maximize profits.

"But let's face it, it's a tried-and-true strategy that most US banks have abandoned as they chase after the (allegedly) big profits that subprime-backed debt, leveraged buyouts and other similarly esoteric investments appeared to promise.

"Yes, FHN really over-extended itself in the credit markets and recently announced a loss of $14.2 million. More losses may be coming. And its ultra-high dividend yield off 7.93% may be in jeopardy. Nonetheless, we think the stock's beating was overdone.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"For the investor who has some money with which he or she is willing to take some risk, I suggest they take a look at the regional banks ETF iShares Dow Jones US Regional Banks (NYSE: IAT), which I've selected as my top speculative pick for 2008," notes Leonard Goodall, CFA and editor of No-Load Portfolios.

"I recommend this ETF for two reasons, a fundamental reason and a timeliness reason. From a fundamental perspective, most of the regional banks in this portfolio have good solid financials and they know their areas of service well enough to avoid the worst aspects of the current real estate crisis.

"The three largest holdings in the fund -- US Bancorp, Suntrust Bank and PNC Financial -- all have records of consistently improving earnings over the last five years. US Bancorp and Suntrust have raised their dividends each of the last five years, and PNC has raised its dividend in three of the five.

"Purchase of the fund now is timely because its price has been pushed down along with all financial stocks that have been the victim of the subprime mortgage crisis.

Although Doug Hughes, Bill Martin and Charles Mizrahi each take differing approaches to stock selection, their latest buys all share several elements. First, while operating in diverse markets, Hawaii, Boston and New York – all three are regional banks.

In addition, all three advisors see their banking bets as value-oriented positions with solid, long-term fundamentals. All three are also buyback and/or takeover plays.

Bill Martin, editor of FindProfit newsletter recommends Valley National Bancorp (NYSE: VLY), which he notes is based in the prime New York City metropolitan banking market.

He states, "VLY has seen its bottom line pressured, primarily due to the flat yield curve. However, there have been no credit issues at very conservatively run VLY, and we don't expect any to develop."

Looking forward, he says, we continue to believe that margins are 'as bad as they will get' for many banks, at least,he notes, for conservative banks without credit challenges such as Valley.

According to Martin, "This means that VLY's bottom-line results should bottom this year and start to improve in 2008."

Meanwhile, he speculatives, "We believe that VLY continues to be a takeout target, as the bank's footprint and under-leveraged balance sheet remains extremely attractive." Further, he states, "With outright ownership of more than 90 buildings in the NYC area, we believe its book value is materially understated."