Janus Capital Group will release its third-quarter earnings this morning, but investors appear to have already handed down their verdict.
Janus shares have fallen 72 percent from their peak in November and are down a crushing 59 percent this month alone.
Janus shares closed Wednesday at $10.34, a low not seen since March 2003, when stocks were pulling away from the last bear market.
Several Janus mutual funds have moved from the top of their class to the bottom over the past few weeks.
Out of a basket of 20 Janus funds, nine ranked among the bottom 25 percent of their peer group for year-to-date performance through Monday, according to data from Lipper. Only one, Janus Global Technology, was in the top quartile.
One reason is that key stocks held in several Janus mutual funds are tanking. Coventry Health Care, a health-maintenance organization whose shares fell 51 percent Wednesday, counted Janus as its biggest shareholder, with a 15.5 percent stake as of June 30.
The story may have a familiar ring to those who were around during the 2000-02 bear market. But Janus executives said safeguards were put in place to make the fund group an all-weather and not just a fair-weather offering.
If the old pattern plays out, Janus will announce some significant job cuts. Rumors are circulating that a 15 percent cut is likely, which would be about 180 jobs out of a workforce of about 1,200.
Janus declined to comment before its earnings announcement but posts regular updates to its investors.
“Despite the market turbulence, I’m confident that Janus is well positioned to weather this storm,” chief executive Gary Black said a month ago.
Analysts who follow the company expect Janus to report earnings of 24 cents a share, down from about 30 cents a share they were expecting a month ago, Bloomberg reports.
So why is a still-profitable Janus being punished so severely?
As the value of an asset manager’s holdings shrinks in a down market, so do the management fees it earns.
Also, investors are bailing out of mutual funds in a big way. Equity funds lost $46 billion to investor withdrawals last month, according to Trim Tabs. Outflows are accelerating this month.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
