Eric Ende, the co-manager of the $315 million FPA Perennial Fund (ticker: FPPFX), these seemingly disparate stocks have a few things in common, among them high returns on equity and reasonable valuations.

While this mid-cap stock fund is down almost 8% this year, it’s outpacing the average fund in Morningstar’s style category and the Standard & Poor’s 500 by more than four percentage points.

Recently, Ende told Barron’s Online about some of the stocks he’s been buying lately.

1. VCA Antech —a starter position. We hope the stock goes down more, and we can add to it at lower prices and average down. The company has a price/earnings multiple of 16 times this year’s earnings, that’s why we only bought a little because we are waiting for it to get cheaper.

2. Wabco Holdings -  The name is derived from Westinghouse Air Brake Co. — [air brakes were] developed in the 19th century to slow down and stop railroad cars. These guys are not actually in the air-brake business for railroad cars anymore. They are in the business of making air brakes for large trucks and trailers.  They make quite high returns on capital. It’s not a terribly capital-intensive business. Their value-added is very much in the design and the electronics. The drivers of the business are improved safety, reduced fuel costs and improved operating convenience for the driver and for the truck. These guys should make $4 this year and the stock is trading at around $43.

3. Signet Group —– We started buying it in the fourth quarter of last year I think and have a relatively large position. The company is in the retail jewelry chain business. They own Kay Jewelers, about three-quarters of their business is in the U.S.; Signet has earned quite decent returns on capital and its operating margins, and its returns on capital have been twice as high as Zales, and clearly they run themselves much better than what is I think the only true publicly traded competitor.

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