A New Look at Janus: Four Favorites

04/25/2003 12:00 am EST

Focus:

Sheldon Jacobs

Author, Investing Without Wall Street, Five Essentials for Financial Freedom

"In the bull market of the 1990s, the Janus Group grew from $15 billion in assets to $250 billion by placing big bets on the Internet and telecommunications stocks," says Sheldon Jacobs, editor of The No-Load Fund Investor. "Unfortunately, what went up then went down and Janus was unable to take proper defensive action to sell its large tech stakes. Its subsequent performance was disastrous." Here's a new look at a new Janus Group.

 

“A lot has happened at Janus this past year; the parent relinquished control to its own executives and  leadership was handed over to Mark Whiston, who had previously been the firm’s chief marketing officer. In April, Janus and Berger funds merged and it remains the sixth largest equity manager in the US. Whiston is attempting to broaden the appeal of Janus beyond growth stocks; in 2000 it had 38% of its portfolios in technology, and this is now down to 8.3%. In addition, there is much less correlation between the stocks owned within the funds. In the less tempestuous times we predict, Janus funds might provide good all-weather investment that could be satisfactory for a wide range of investors. Here are four Janus funds in particularly that we recommend.  We also note that theses funds have significant tax losses, which means they won’t be distributing capital gains for some time.

 

Janus Enterprise (JAENX) is an aggressive growth fund. It focuses on mid-cap stocks and its one-year forward P/E is 25, about the same as its estimated forward growth rate of 26%. That’s good. In the 1990s, investors were paying two or more times the growth rate, so we’re happy to see funds go back to the old standard of paying about the same level. The fund is non-diversified. Top industries are oil, radio, and medical instruments. The fund has 6% in foreign stocks and 7.7% in cash.

Janus Olympus (JAOLX) can own stocks of all cap sizes but currently is tiled toward large-caps. Its beta is .06, still a bit higher than the market. The one-year forward price/earnings ratio is 23.4 while its forward growth is estimated at 22.7% Olympus’ latest tech weighting is 13%. The top industries are cosmetics, oil companies, finance, semiconductors, and medical. Olympus is managed by Claire Young, sister of Helen Young Hayes.

 

Janus Special Equity (JSVAX) focuses on valuations, mostly in mid-cap companies. It currently owns 43 stocks with the largest holding, Liberty Media, at 7.3% of assets. 27% of its assets are invested overseas.  It has the best relationship of P/E to growth rates: a one-year forward price/earnings ratio of 24, far less than the estimated forward growth rate of 33%. Its turnover rate is only 31%. David Decker has run the fund for three years.

 

Janus Fund (JANSX) is a growth fund that invests primarily in large, established companies. However, with a 1.21 beat, it is quite aggressive by growth category standards. Furthermore, the relationship between its average P/E and the growth rate of its stocks is not quite as favorable as some of the other funds.  Its one-year forward P/E is 23 while its forward growth rate is 18%. Other facts: the fund’s heaviest weighting is among media stocks, with Viacom, Comcast, and AOL/Time Warner, the three largest holdings, each accounting for over 5% of assets. It has been managed by Blaine Rollins for the last three years.”

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