Rudi's View | May 09 2019
In this week's Weekly Insights (published in two parts):
-Value & The Eye Of The Beholder
-Helping Pengana Selling The ESG Message
-CSL Challenge: The Winners
-Rudi On TV
-Rudi On Tour
[Non-highlighted parts will appear in Part Two on Friday]
Value & The Eye Of The Beholder
By Rudi Filapek-Vandyck, Editor FNArena
In early May (last week), the once highly popular ASX-listed funds manager Janus Henderson ((JHG)) released a rather underwhelming March quarter financial performance report.
Among the key performance metrics that stood out was a -21% fall in earnings per share versus a year earlier, a sizable fall in operating margin to 34.4%, net funds outflows of -US$7.4bn, negative growth in performance fees, and an unchanged quarterly dividend of US36c. The latter is disappointing as the board is committed to a progressive dividend policy.
The day after the ASX release, the shares fell from above $35 to near $31, where they have remained since (well below most stockbroking analysts' price targets).
For Australian investors, whether they are shareholder in the company or not, it might be worthwhile to pay closer attention to what exactly is happening at the merger company (Janus and Henderson merged in 2017) because of the potential wider implications, including:
-global equity markets posting a strong V-shaped recovery year-to-date, while share prices for wealth managers in general have not full heartedly participated in the rally;
-Australian share market indices are now back near their post-GFC high, but earnings forecasts ex-resources continue to slide, as again witnessed when the banks reported this month, and with Janus Henderson's update equally triggering further reductions;
-the Value-style of investing has not kept up with Growth and the broader market for six consecutive years. Janus Henderson is a value-investor itself and its own shares would have looked attractive to other value investors pre-quarterly update.