The financial sector continues to get hammered as 4 major corporations reach 52 week lows. Citigroup (C), Bank of America (BAC), Morgan Stanley (MS), and SunTrust Banks (STI) all reached 52 week lows as a result of economic worries. The sector has now seen a YTD loss in excess of 9% despite strong earnings. If a long lasting recession is to take place there is no doubt the financial sector and money center banks will get hit the hardest.

The Emergency Economic Stabilization Act of 2008, commonly referred to as the bailout, remains fresh on investors' minds. It was a time where the government purchased distressed assets to aid in the recovery of our economy. The recession was a domino effect that included many countries all experiencing turmoil.

Looking back to the end of 2008 you can see why many believe we are headed towards another recession. I do not believe we have reached that point nor do I believe we will experience a market similar to 2008. Companies are turning record profits and have shown all the signs of growth. Yet with 2008 so fresh on our minds, investors jump at the first whisper of a recession.

It is a scary word for so many that lost so much during this time. In May of 2007 Citigroup traded at a price of $55 a share (before the 1:10 split) and on March of 2009 the stock was trading under $2 a share. In less than 2 years the stock price decreased to this level. If you had owned $10,000 worth of shares in May of 2007 your investment in Citigroup would have been less than $400 in March of 2009.

Therefore, I do not expect the market to forgive the financial sector over a short period of time. The growth has been slow for many of the largest banks traded in the market. The financial sector has seen loss greater in comparison to the S&P. The Money Center Banks Industry has seen a drop of nearly 12% in one month. This loss is significantly greater than the S&P or financial sector loss over the same period of time.

Several top banks within the industry tested 52 week lows and many others are trading very close to their year lows. Four stocks that reached 52 week lows include Citigroup, Bank of America, Morgan Stanley and SunTrust Banks. Each company witnessed a massive sell off during the recession in 2008, with investors losing a great portion of their investment.

The financial sector has dropped over 9% in one month. The four financial institutions listed above have dropped by more than 17% during the same period. This should illustrate the market's fear of repeating history with both financials and these four stocks.

I do not see history repeating itself with these companies. I believe the bailout was successful in establishing strength and removing toxic assets. However we may experience some bumps in the road. The financial sector may get worse before it gets better. Of the four financial stocks that have reached 52 week lows I like Citigroup as the company with the most upside. Read More