Janus Capital Group announced Tuesday that its board of directors has approved a plan to buy back $500 million worth of the company’s own stock.
“Janus is sitting on a lot of cash … and they want to put it to work,” said Craig Woker, an analyst with researcher Morningstar in Chicago. “The board is saying to management, ‘If you think it’s at a good price, then go buy it.”‘
A motive for launching a buyback program is if management “thinks the stock price is dirt cheap,” said Charles Biderman, chief executive of Trim Tabs Investment Research in Santa Rosa, Calif.
Morningstar lists a target price for Janus at $17 a share; the company’s shares closed Tuesday at $20.99 a share, down 1.4 percent for the day.
Janus’ stock has surged by 43.8 percent since Oct. 1, based largely on improved performance, rising revenues and speculation of a possible management buyout.
The balance sheet of the Denver-based mutual-fund giant shows $886.7 million in cash and $376.3 million in debt. That gives Janus “a lot of flexibility,” said chief executive Gary Black, who took the reins at Janus in January.
“We believe strongly that our stock is a very good investment,” Black said Tuesday. “The business continues to turn around.”
Janus is already conducting a $500 million stock buyback program, which it started in 2004. A total of $124 million remained outstanding as of Dec. 31.
The new buyback program will start as soon as the current one is complete or expires at the end of 2006, according to a Tuesday securities filing.
Also Tuesday, Janus announced that board members for uncontested seats would be elected by a majority of shares voted. Previously, such seats could be elected by a plurality.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
