He views JPMorgan Chase (JPM) as a winner. The stock, which hovers around $45 a share, could hit 60 to 70 in the medium term, he argues. "The company has been able to earn $4 to $4.50 a share over time," he says; "now that run rate could climb to $6.50," due to its purchasing the assets of Bear Stearns and Washington Mutual at fire-sale prices.

Schutz's portfolio these days is eclectic, ranging from well-known names, like insurance giant Travelers (TRV) and investment bank-turned-"regular"-bank Morgan Stanley (MS), to lesser-knowns, like Invesco Mortgage Capital (IVR) and Chimera Investment (CIM). The last two are specialty finance companies established to invest in distressed real-estate assets, mortgage loans and mortgage-backed securities. "These kinds of new entities will benefit as book values grow; meanwhile, they will be paying out significant yields," Schutz says.

Schutz's portfolio these days is eclectic, ranging from well-known names, like insurance giant Travelers (TRV) and investment bank-turned-"regular"-bank Morgan Stanley (MS), to lesser-knowns, like Invesco Mortgage Capital (IVR) and Chimera Investment (CIM). The last two are specialty finance companies established to invest in distressed real-estate assets, mortgage loans and mortgage-backed securities. "These kinds of new entities will benefit as book values grow; meanwhile, they will be paying out significant yields," Schutz says.

The Invesco real estate investment trust is advised by a group including veteran distressed-assets investor Wilbur Ross; Chimera, another REIT, was launched by Annaly Capital Management, which retains a 6.7% stake.

Schutz's portfolio these days is eclectic, ranging from well-known names, like insurance giant Travelers (TRV) and investment bank-turned-"regular"-bank Morgan Stanley (MS), to lesser-knowns, like Invesco Mortgage Capital (IVR) and Chimera Investment (CIM). The last two are specialty finance companies established to invest in distressed real-estate assets, mortgage loans and mortgage-backed securities. "These kinds of new entities will benefit as book values grow; meanwhile, they will be paying out significant yields," Schutz says.

Schutz wants to own banks awash in capital. While that has mostly meant avoiding banks in Florida, California, Nevada and Arizona, one of those he has snapped up is CenterState Bank (CSFL), based in Davenport, Fla. "They have retained a tremendous amount of capital," Schutz says. "They are in the middle of Florida, where there are enough interesting deals to be done at bargain prices that they could double their size, and then some." At about $7.30 a share, the stock is itself a bargain, trading for about half its book value, he adds.

Another cash-rich bank is 1st United Bancorp (FUBC), a Boca Raton, Fla.-based lender that raised $70 million in capital in late September: "That is capital that is offensive in nature; they will be using it to buy wounded, sick institutions and that will create value for investors."

Schutz's net has also swept up names like Ameriprise Financial (AMP). He says the money manager trades at prices that don't reflect the value of its assets, which include the Columbia family of mutual funds just purchased from Bank of America.