Ariana Research
Long/short equity, deep value, special situations

Janus: Abnormally High Returns On Invested Capital At A Low Multiple Of Free Cash Flow

Janus Capital Group, Inc. (NYSE: JNS)

Executive Summary

Janus Capital Group, Inc. ("Janus", "JNS" or the "Company") is a leading asset manager. The Company has a market cap of $1.60B and an enterprise value of $1.43B. As of TTM 6/30/13, the Company generated revenues and free cash flow of $855.6MM/$188.4MM, respectively.

Janus common shares have recently lagged and have forgone the attention of many investors. The drivers stemmed from (1) sluggish flagship mutual fund performance amplified by the use of performance fees, which negatively impacted earnings; (2) choppy AUM as Janus' AUM troughed at $123.0B in FY2008, peaked at $169.0B in FY2010 and currently stands at $160.6B; (3) net fund outflows of $5.4B for Q2/13 (within the Janus platform)

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