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 Shares of the Denver company rose 11 percent on Thursday after
fourth-quarter earnings came in above expectations with the help of
new hire Bill Gross, even as it acknowledged that half the money in
his fund came from Gross himself.
Since the surprise Sept. 26 announcement of Gross' hiring from
Pacific Investment Management Co, shares of Janus have surged 63
percent.
Janus reported net deposits of $2 billion to its funds for the
quarter. This was the first quarter since 2009 that clients added
more cash than they withdrew.
The inflows and improving performance trends marked a long-awaited
milestone for Janus and Chief Executive Officer Richard Weil.
Speaking on conference call with analysts, Weil said Gross had
invested more than $700 million into the fund he took over, Janus
Global Unconstrained Bond Fund <JUCAX.O>. That takes some of the
shine off the fund's rapid rise to $1.4 billion in total assets at
Dec. 31.
If more of the fund's flows had come from outside investors, it
would be seen as a bigger vote of confidence in Gross, whose last
year at Pimco was marred by infighting and lagging performance.
But that still left half the assets coming from other sources, and
Weil said the money showed that Gross shares his clients' interests.
"He believes in eating his own cooking," Weil said.
Sandler O'Neill analyst Michael Kim said the disclosure of Gross'
big position "does call into question the sustainability" of the
fund's flow trends.
Still, Kim said the stock was reacting to other positive news from
Janus, such as broader distribution of its funds and new products.
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Since arriving in 2010 from Pimco, Weil has struggled with Janus'
traditional lineup of out-of-favor active equity funds. He said on
Thursday's call that the quarter showed Janus making headway but
cautioned it must sustain inflows.
"We're reporting on progress rather than victory," Weil said.
Janus said its total assets under management were $183.1 billion at
Dec. 31, up from $174.4 billion on Sept. 30.
Fourth-quarter net income rose to $46.7 million, or 24 cents per
share, from $38.3 million, or 21 cents per share, a year earlier.
The results beat the analysts' average estimate by 4 cents a share,
according to Thomson Reuters I/B/E/S.
(Reporting by Ross Kerber; Editing by Lisa Von Ahn and Tim
McLaughlin)
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