Bill Gross Boosts Janus

02/06/2015 8:00 am EST


Michael Cintolo

Vice President of Investments and Chief Analyst, Cabot Heritage Corporation

This featured stock—a Denver-based investment group—recently reported monster fourth quarter earnings and one man was largely responsible for it: Bill Gross, notes Mike Cintolo, editor of Cabot Top Ten Trader.

America’s most high-profile bond investor—a financial media regular and the former manager of PIMCO—joined the team at Janus Capital (JNS) in September and was quite busy in his first full quarter with his new firm.

Gross invested $700 million of his own money in Janus’ Global Unconstrained Bond Fund, which he now manages.

Because Gross is essentially the Pied Piper of bond investing, many other investors followed: Janus’ fixed-income funds attracted $2.8 billion in the fourth quarter.

It marked the first quarter of net deposits in more than five years for Janus, halting a streak of 21 straight quarters of withdrawals.

According to Bloomberg, Janus’ Global Unconstrained Bond Fund swelled from a scant $13 million before Gross’ arrival to $1.38 billion as of December 31, 2014.
For the quarter, Janus Capital reported earnings per share of 24 cents, 20% higher than consensus analyst expectations and a 14% improvement from the fourth quarter a year ago. Call it “The Bill Gross Effect.”

Unsurprisingly, Bill Gross’s move has had a profound impact on JNS. The stock shot up 43% in one trading session on September 25, the day news of Gross’ arrival was announced.

For the nearly four months that followed, JNS shares were up and down, wavering between 14 and 17. The recent Q4 earnings report, however, sent the stock soaring more than 12%, settling above 18 for the first time since August 2008.

If the fallout from Janus’ big September run-up is any guide, expect shares to pull back a bit in the coming days. But the Bill Gross Effect is still in its honeymoon phase, so it’s unlikely the stock’s move is over.

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