Paperstand (JNY, PFG)

The WS's "Heard on the Street" column discusses Jones Apparel (JNY), saying that designer Isabel Toledo may be just the accessory needed to spiff up the co. On a conference call with analysts yesterday, Howard Socol, CEO of the co's Barneys NY unit, called the hiring of Ms. Toledo "the 2nd-best thing" Jones CEO Peter Boneparth has ever done, after acquiring Barneys in '04. Barneys, which chooses its own designers, has committed to carrying the Anne Klein collection. Upscale competitors such as Nordstrom and Neiman Marcus are expected to carry pieces, too. Boutique owners like Ikram Goldman, owner of Ikram, also wrote orders after the runway show. But whether the revival of Anne Klein can change the fortunes of its parent remains to be seen. After yesterday's announcement of the 4Q loss the stock slipped. "The Anne Klein thing is worth watching and worth noting, but we are still far away from where it could be a needle-mover," said Bob Drbul, of Lehman Brothers. Ted O'Connor, of Cooke & Bieler, agrees with the Lehman assessment. But he is excited about the revival of Anne Klein, saying that lately the stock has moved only on deal speculation. "I think they are doing the right thing," he said. The money-mgmt firm, which has about $9bn in assets, owned 4.7M Jones shares as of Dec. 31.

Barron's Online highlights Principal Financial (PFG), saying that some on Wall St. knock the stock as an expensive player in the mature insurance industry. But 70% of Principal's earnings come from mutual funds, institutional asset mgmt, and 401(k) plans and other retirement services. The 401(k) business is expanding as small co's catch up to the Fortune 500 with retirement offerings, and as 2006 pension reform encourages greater savings for retirement. Plus, Principal's annuities should be attractive to Baby Boomers, who should live longer than previous generations. Trading near an all-time high, Principal shares reflect some of that potential. But future growth should allow its P/E multiple to expand and push the stock higher. "Principal has an attractive portfolio mix that benefits from the increasing longevity of the aging population," says Sterling McMillan, of Greenleaf Capital Mgmt. "We believe Principal has the continuing opportunity for steady growth of earnings and revenue that justifies its current multiple."