Is TODAY the day to buy Lloyds Banking Group plc, Legal & General plc and Standard Life plc?

Financial stocks have been hit particularly hard by the post-Brexit sell-off but the following three big short-term losers could prove great long-term winners for your portfolio.

Lloyds Banking Group

Lloyds Banking Group (LSE: LLOY) suffered a year’s worth of volatility in a few hours on Friday and lost a fifth of its value over the day, to end up 19.93% lower. The pain has continued today: at time of writing Lloyds is down 9%. It could be worse, trading in Royal Bank of Scotland Group and Barclays has just been halted, with the stocks down 14.2% and 11.5% in an hour.

Bank of England governor Mark Carney has pledged to do whatever it takes to save the UK banking system and all the banks have been pushed hard to shore up their balance sheets in recent years, so a complete meltdown can be ruled out. Private investors are seizing the opportunity, with Lloyds accounting for one in 10 retail buys, according to trading platforms. At just 6.71 times earnings, it certainly looks cheap. A forecast dividend yield of 6.7% by December, and 7.8% the year after that, may help offset the agony of lower interest rates for longer. Lloyds’ domestic focus could prove a burden if the UK economy takes a hit, but much of the pain does seem to be priced-in. 

Legal & General Group

It was inevitable that the insurers would take a hit as well, as turbulent global stock markets ravaged their investment arms. Legal & General Group (LSE: LGEN) ended the day 17.47% lower, and has fallen more than 9% so far on Monday morning. L&G specialises in low-cost investment services, with a large suite of tracker funds, so it’s inevitable that it’s tracking global stock markets down.

But it withstood Chancellor George Osborne’s assault on annuities in good shape, and investors will be hoping it can show similar resilience to Brexit. Markets have lived in a state of semi-crisis since 2007, and one thing we’ve learned is that share prices can spring upwards when least expected. Trading at 10.15 times earnings, the price looks decent for a company that recently posted a 14% rise in both full-year profits and cash generation, and whose Solvency II surplus stood at £5.5bn, giving a coverage ratio of 169%. The current dividend yield of 7.1%, covered 1.4 times, will give you a juicy income stream as the EU exit plays out.

Standard Life

Another insurer, another disastrous Friday, with Standard Life (LSE: SL) down 17.16%. Monday has also been painful, although a drop of 6.13% looks relatively calm compared to some of the blow-offs out there. You can’t blame the referendum for all Standard Life’s woes, its share price has been steadily sliding over the past 12 months, as volatile stock markets took their toll on a company that has transformed itself from a traditional life insurer to an IFA wrap platform and specialist wealth manager.

The stock currently yields 6.5% although cover looks thin at 0.7 times. Today’s valuation of 21 times earnings initially looks pricey but a whopping 94% forecast rise in earnings per share in 2016 almost halves that to a more tempting 11 times. Nothing is guaranteed but at times like this investors have to embrace uncertainty, provided they can then cling on for the long term.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.