Ken Heebner, manager of CGM Focus fund, is warming up to financial stocks according to this WSJ article. Heebner, who has one of the best performing mutual fund records over the last decade, has been loading up on financials. According to his fund’s Sept. 30 portfolio report, the fund held 40% in financials although the current exposure is not as high. He uses two lesser known metrics when analyzing finance companies. One is the “price-to-tangible book value”, while the other is “price-to-preprovision earnings”. An interesting tidbit is that Heebner launched a private partnership he started in June called Wayfarer Capital LP. It will be worthwhile keeping an eye on this investment vehicle given his impressive track record.

Financial stocks were also the highlight of a New York Times article today. Well known fund manager Ron Muhlenkamp “expects regulators to move to a system where valuations are less sensitive to day-to-day price fluctuations but provide better estimates of long-term worth.” The result, says Muhlenkamp, will be higher stock prices for many financial firms.

These are contrarian-like calls from two successful fund managers. Sometimes the most money is made by looking in areas of the market that no one wants anything to do with — but only time will tell if Heebner’s and Muhlenkamp’s bullishness on financials will pay off.