Analysts: Janus Capital Group Inc. Run-Up Unjustified

Janus Capital Group Inc. JNS big recent run-up is unjustified based on realistic prospects stemming from the hiring of celebrity bond trader William Gross. Gross abruptly quit as a manager of the $2 trillion Pimco unit of Allianz SE AZSEY on Friday and migrated to the $200 billion Janus. The parlor game for analysts now is estimating the amount of assets Gross can attract to Janus, through a soon-to-be established bond fund. Janus is known for managing equities rather than bonds. J.P. Morgan's Kenneth Worthington pegged the amount at between $3 billion and $6 billion in the next 12 months and suggests that's not enough to justify Janus' gain Friday of more than 40 percent. Moreover, Gross is 70 years old, and it's "unclear how much longer Gross will manage money aggressively," Worthington said. However long that may be, it "will take time" to see how many clients follow Gross to Janus from Pimco, according to Bernstein's Thomas Seidl. Or, make that "a considerable amount of time" according to Moody's analyst Neal Epstein, who thinks the result for Janus won't be significant. Analysts at Makor Capital think Janus' recent share-price gain would be justified if Gross brought in between $50 billion and $100 million in managed assets. "We think that's grossly over-optimistic," Makor said, adding that Janus shares are over-valued. "Thank Bill Gross and exit," Makor advised. Janus traded recently at $14.67, down nearly 8 percent.