ebook essays pieces of the puzzle
Wednesday, February 1st, 2012
two faces

Janus Capital Group (JNS) went public in mid-2000, just after the stocks in which it specialized peaked.  The chart shows that the assets under management and revenues are nowhere near where they were then, with predictable results for the company’s stock.

The firm has now had ten quarters of outflows from its funds.  And while it is gaining ground in fixed income (as opposite a face for investors from its traditional business as you can find), the fees are less there, so revenues will grow more slowly than assets under management.  A Morningstar credit report says its actions may be “too little too late.”

On the other hand, in November Frank Voisin wrote that the market was looking at the wrong metrics, which might make JNS a value opportunity.

Should the stock market rally, that will likely be the case, as it will be for the asset management companies as a group.  But the industry is carrying some heavy baggage right now, structured for a world that is leaving it behind.

Janus is a cautionary tale.  An “it” asset manager can become a “has been” in a hurry.  Coming back from the fall is very hard.  (Chart:  Bloomberg terminal.)