Some of my notes from this week’s Barron’s. Pick up the hard copy for the full story and much more.

APPL – possible gain of 20% or more with introduction of new products later in the year. Bear case (1) markets are saturated, margins will compress, and new categories won’t be able to move the needle and (2) Steve would have done it better.

On the plus side, new product including bigger screen later in the year. APPL has sticky customer base.

EPS to rise 3% this year to $42.76 and another 8% next year. Shares are at 12x 2014 projected earnings at 8x taking out the cash. Possible buyback and higher dividends with new CFO. And buyback would be at these value levels.

PRINCIPAL DESERVES MORE INTEREST

PFG might be undervalued by 25%.

Life insurers’ average multiple 9.9 x $1.28 = $12.67
Money management average multiple of 15.8 x 1.7 = $26.86
SP500 average multiple to remainder of business 14…=$17.92

Sum is $57.45 versus current price of about $46.

RIGHT THE SHIP AT MCDERMOTT

MDR – $8.19 – Stock is down 25% in the last year and 70% from 2011 high. Andy Kaplowitz of Barclays thinks 2015 earnings can get to 60 cents from a 25 cent loss this year. Shares could rise to $10 within a year.

Normalized earning might be $1 per share.

Book value is $5.70 but fair value might be between $8.60 and $10.