On Mar 20, 2013, we reiterated our long-term recommendation on
Janus Capital Group Inc.
) at Neutral, based on the company's best-in-class investment
boutique with the potential for assets under management (AUM) and
revenue along with competitive leverage growth. However, weakness
in flows remains a matter of concern.
Janus Capital reported fourth-quarter 2012 earnings per share
attributable to common shareholders of 19 cents, beating the
Zacks Consensus Estimate by a sliver. Moreover, results compared
favorably with prior-quarter earnings of 15 cents per share.
Higher top-line growth and decreased operating expenses,
reflecting better expense management were the positives for the
Janus Capital has taken several initiatives to strengthen its
businesses. The company is currently focused on aggrandizing its
fixed income business including trading and investment. We expect
the company's strategic efforts to lead to such strong outcomes,
which have crossed $25 billion in assets under management for the
first time in the company's 40-year history in 2012, up 28% from
2011. This, in turn is expected to aid top-line expansion in the
However, at the current level, the asset management business is
under cyclical and secular pressures along with ongoing margin
pressures, many of which have been aggravated by the financial
crisis. These pressures include volatile markets and new
regulatory compliances. Though Janus Capital remains well
positioned over the long term, given short-term performance
hindrances and macro headwinds, a limited upside is expected in
Following Janus Capital's fourth-quarter 2012 results, the Zacks
Consensus Estimate for 2013 increased 3.3% to 63 cents per share
owing to the upward movement of 7 out of 11 estimates, over the
last 60 days. Moreover, the Zacks Consensus Estimate for 2014 has
moved north by 1.4% to 75 cents with 3 of 11 upward revisions
over the same time frame. Currently, the company retains a Zacks
Rank #3 (Hold).
Other Major Companies to Consider
Besides Janus Capital, other investment managers that are worth
Apollo Global Management, LLC
Virtus Investment Partners, Inc.
). All the companies retain a Zacks Rank #1 (Strong Buy).
APOLLO GLOBAL-A (APO): Free Stock Analysis
JANUS CAP GRP (JNS): Free Stock Analysis
LAZARD LTD (LAZ): Free Stock Analysis Report
VIRTUS INVESTMT (VRTS): Free Stock Analysis
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