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Why the Janus Henderson share price could crash lower today

share price falls

The Janus Henderson PLC (ASX: JHG) share price looks set to tumble notably lower this morning following the release of its first quarter results after the market close on Thursday.

Over on Wall Street the asset manager’s U.S. listed shares finished the day 6.5% lower.

What happened in the first quarter?

In the first quarter of FY 2019 the company posted adjusted quarterly revenue of US$417.4 million, which was down 11.2% on the prior corresponding period. This was caused by a slight decline in management fee margin due to outflows in higher fee equity products and lower performance fees from segregated mandates.

Janus Henderson finished the period with asset under management of US$357.3 billion, down 3.9% on the first quarter of FY 2018.

This ultimately led to the company reporting first quarter net income of US$94.1 million, which was a decline of 43% on the prior corresponding period and a 13.5% decline on the fourth quarter of FY 2018.

Chief executive officer, Dick Weil, appeared disappointed with the company’s performance during the quarter but encouraged with its prospects.

He said: “Overall investment performance for the quarter was strong, but we continue to face pockets of underperformance which are driving substantial net outflows. That said, we are seeing encouraging results in several areas of our business, including momentum in the US retail channel, primarily with our US Equity strategies, ongoing growth in our Multi-Asset capability, and an improving environment in Continental Europe.”

The Janus Henderson board has declared a first quarter dividend of US$0.36 per share. Shareholders on the register on the record date of May 13 will be paid the dividend on May 29.

Should you invest?

I thought this was a disappointing result from Janus Henderson and wasn’t surprised to see its shares tumble lower on Wall Street.

Whilst I think it is a quality company, I would stay clear of its shares until its performance improves. Until then I prefer the likes of Magellan Financial Group Ltd (ASX: MFG) and Macquarie Group Ltd (ASX: MQG).

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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