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  • Barron's had a very good magazine edition this week profiling a "tired" bull market.
  • According to its survey of money managers, large cap value stocks will continue to outperform high momentum stocks like they have done so far in 2014.
  • Barron's goes on to profile two large cap value stocks it believes still have significant upside.

Barron's, the widely read and followed weekly industry magazine, had a very interesting issue this week. The cover story was entitled "Tired Bull" which covers the latest big money poll showing fund managers much less "gung ho" than they were six months ago. The survey also postulated that the high momentum stocks like Tesla Motors (NASDAQ:TSLA) would continue to struggle while the large cap value stocks that have outperformed the market in 2014 will continue to do so.

Barron's then provides a few other articles pointed to how well known large caps like American International Group (NYSE:AIG) and Apple (NASDAQ:AAPL) are still significantly undervalued and have further upside. This echoes my own thinking. Apple is my largest tech holding and biggest overall position and has been since July of last year. American International Group is my second largest position in the financial sector and is woefully undervalued compared to its peers. Let's take a look at what Barron's is saying about both.

As I have stated several times over the past few months, American International Group is selling at a deep discount to book value. Barron's points out in an article that the insurance stock is selling at just ~three quarters of its tangible book value.

The piece also covers a few items I have not mentioned in my previous articles. Barron's believes the stock could double in five years as it improves its return of equity which is around half that as peers. It should be able to shore this up as $10B to $15B in tied up capital with derivatives and investments tied up in assets from the financial crisis which should run off over the next few years.

AIG also has $20B in deferred tax assets and should get $6B when it sells off its aircraft leasing business this quarter. In addition, the company should be able to substantially up its dividend from its current 1% yield. Most competitors like Travelers (NYSE:TRV) are selling at 1.1x to 1.3x book value and have more than twice the dividend payout ratio. AIG should provide desirable returns over the next few years for patient value investors.

Apple is the subject to several positive articles in this week's Barron's. The company delivered the goods during its quarterly report this week. I detailed recently how stellar the results and company announcements should be for the stock.

The first article notes that Apple bought back $18B of its own stock in its recently completed quarter and raised its stock repurchase program by $30B as well. The piece postulates the new buyback authorization will bump its earnings this fiscal year by ~6% and in FY2015 by 5%.

The second article noted that there still is growth from Apple's iPhone franchise which represents just under 60% of its total revenues. iPhone sales for the quarter came in at 43.7mm, approximately 6mm above the consensus. This beat sets the company up well for its fall launch of the much anticipated iPhone 6 which should come with long clamored for larger screens.

The stock is still cheap at under 10x forward earnings subtracting net cash and yields 2.4% with the recently announced 8% dividend hike. Finally, Barron's noted Apple now provides more overall dividends to shareholders than any other stock in the S&P 500.

Both of these equities should benefit from these positive articles in Barron's early in the trading. Most importantly, both stocks represent solid long-term value in an increasingly volatile stock market. ACCUMULATE

Disclosure: I am long AAPL, AIG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Barron's Calls Out These Large Cap Names For Significant Further Upside