By Dan Freed

Wall Street investment banks are set for massive, share-price gains on the back of huge profits, iconoclastic stock picker Dick Bove said at a media luncheon he hosted Wednesday. He once again is going against the grain on this call.

"Investment banking is absolutely pregnant with an explosive growth trail ahead of it," Bove argued, noting that Goldman Sachs (GS), whose shares have lost more than 23% over the past five years versus a 13% gain for the S&P 500 ($INX), is his top pick.

The bullishness is especially surprising since most other industry optimists tend to be focused on cost cuts as the major driver of stock performance. 

Indeed, every couple of weeks, another institution seems to announce widespread layoffs. Earlier this month, Morgan Stanley (MS) said it would eliminate 1,600 jobs in its investment bank, according to several media reports. Those cuts come fast on the heels of even bigger ones at UBS (UBS), Barclays (BCS) and Citigroup (C).

Bove argued that the negative signals were actually bullish.

"I've been in the business since 1965. If you go back to 1965, the best indicator of a turn in the markets is when they start firing all investment bankers," he quipped.

Bove, who recently resurfaced at Rafferty Capital Markets, a small, Garden City, N.Y securities dealer, after a trading scandal hobbled his previous employer, is also optimistic on banks that don't have much in the way of capital markets businesses.

Overall, he predicts a 14-year run for the banking industry, arguing a cyclical rebound in the U.S. economy is well under way, and strong bank balance sheets make the industry well-positioned to benefit from a stronger economy.

Bove recommends virtually every stock he covers, from giants like Bank of America (BAC), JPMorgan Chase (JPM) and Citigroup, to regional players like Regions Financial (RF) and Comerica (CMA), to smaller advisory-focused firms like Greenhill (GHL), Lazard (LAZ) and Evercore (EVR).

He doesn't have a single "sell" recommendation, though he has "hold" ratings on Wells Fargo (WFC) and State Street (STT), arguing valuations make those banks too expensive on a price-to-book value basis.

More from TheStreet.com

• 4 banks to buy now from JPMorgan
• 4 stocks rising on big volume
• Facebook: spending like a drunken sailor?