Janus Capital Keeps Lowering Outflows - Analyst Blog

On June 9, 2014, we issued an updated research report on investment management firm – Janus Capital Group, Inc. JNS. The company exhibits decent fundamentals amid a competitive environment in the industry.

Plagued by an uncertain market environment, Janus Capital is facing challenges in reducing its net outflows. Nevertheless, the company's diversification strategy that focuses on product innovation and multi-boutique approach has helped in lowering overall net outflows. Net outflows decreased to $1.5 billion in first-quarter 2014 from $3.9 billion in the prior-year quarter. We remain optimistic about the efforts being taken by the company and expect Janus Capital to experience overall net inflows in the near term.

Bolstered by a solid liquidity position, Janus Capital has enhanced shareholder value from time to time. Recently, in Apr 2014, the company's board of directors increased its regular quarterly cash dividend by 14%. Notably, during first-quarter 2014, the company repurchased shares worth $11.3 million and paid $13.4 million in dividends to shareholders. We believe such shareholder friendly initiatives will continue to boost investors' confidence.

Additionally, analysts' bullish stance on the stock was reflected in the movement of the Zacks Consensus Estimate over the past 60 days. For 2014, the Zacks Consensus Estimate advanced 4.0% to 78 cents per share while it moved north by 8.5% to 89 cents for 2015.

Despite the positives, we remain cautious owing to several issues faced by Janus Capital that pose a threat to the company's financials. These include a volatile equity market, continuous increase in negative performance fees and the prevailing stringent regulatory landscape.

Janus Capital currently carries a Zacks Rank #2 (Buy).

Stocks that Warrant a Look

Cohen & Steers Inc. CNS, Woori Finance Holdings Co., Ltd. WF and Ameriprise Financial, Inc. AMP are among the other top-ranked stocks in this space. Cohen & Steers and Woori Finance sport a Zacks Rank #1 (Strong Buy), while Ameriprise carries the same rank as Janus Capital.



 

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