Seven years after the collapse of Lehman Brothers tipped off a global financial crisis, investors are still leery of financial stocks, which as a group have yet to fully recover. “Whenever there is uncertainty, investors’ knee-jerk reaction is to sell financials,” says Chris Davis, chairman of Davis Advisors.

Yet, he thinks the opportunities in financials are as compelling today as they were in 1991, when he launched the $830 million Davis Financial fund (ticker: RPFGX). Despite record profitability, improving market share,...