With $237 billion in assets, Federated is one of the nation's largest investment managers. And it's one of the most profitable, as well, with a return on capital of 40 percent, among the highest in the industry. But its stock has stalled, in part because many of its equity funds have lagged lately. (One exception is its top-performing Kaufmann fund, a longtime standout with $10 billion in assets). But CEO Christopher Donahue is taking steps to improve the funds' performance by beefing up in-house research and adding risk controls. He recently bought MDT Advisers, a highly regarded quantitative equity shop with $7 billion in assets. Federated, which is a large holding in Chuck Royce's market-beating Royce Premier fund, sells for about four times book value, a large discount compared with its peers. Reinhart pegs Federated's PMV at $43.