Although the increasing value of Janus Capital Group's stock is good news for its market capitalization, now at $4.8 billion, and a sign that investors believe the company is improving its performance, the stock's 50% run-up since October has had at least one negative drawback, The Wall Street Journal reports.
With its shares trading at $22.27 as of the close of last week, the price of Janus' stock has put management's planned buyout of the firm out of reach.
Shares in Janus are trading at 29 times this year's projected earnings per share, which is 30% higher than the average asset management firm and nearly twice the average stock in the S&P 500. Driving this strength is the expected comeback for growth stocks, for which Janus is so well known, and a marked improvement in the performance of its funds. A year ago, only 23% of its funds outperformed their peers in the trailing five years, but today, on the strength of their performance in 2005, 60% have done better than their peers in the trailing five years.
There are other fundamental strengths within its business. Janus has $500 million in cash on its books, and charges for a 2002 stock-option grant will fall to $31.3 million this year and be erased after a final $7.8 million payout in 2007. In addition, next year, Janus will have the right to sell an unprofitable printing business it acquired through a share swap with DST Systems in 2003.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.