The Janus Henderson Group CDI (ASX: JHG) share price is having a fantastic day today. Janus Henderson shares are up 7.17% at the time of writing to $41.99 a share.
That came after a very strong open for the company, which saw the Janus Henderson share price spike all the way up to $43.08 – almost 9% higher than the $39.37 price the company closed at yesterday.
At $43.08, it’s also the new 52-week high and the highest level this company has traded at since mid-2018. It also means the Janus Henderson share price is up almost 98% from the lows the company reached in March. However, we’re still a long way away from the ~$64 a share levels we saw back in late 2015.
So who is Janus Henderson? And why are the shares spiking so enthusiastically today?
Janus Henderson is in the business of asset management. It’s a funds management company that is actually dual-listed, hence the ‘CDI’. It (of course) appears on the ASX under the ticker JHG. But it is also listed on the New York Stock Exchange as Janus Henderson Group PLC (NYSE: JGH).
Despite these two listings, it is actually headquartered in the United Kingdom (explaining the PLC on the end there). So we have a real globetrotter here! This is explained by the fact that Janus Henderson used to be 2 separate companies – you guessed it, Janus Capital Group and Henderson Group. Janus was an American company, and Henderson, British before the two merged in 2017.
So, as we just touched on, Janus Henderson is a fund manager. The company states that: “Our individual, intermediary and institutional clients span the globe and entrust us with… their assets”.
It offers both mutual funds (managed funds) and exchange-traded fund (ETF), although its Australian offerings are more or less restricted to ‘wholesale’ (read ultra-wealthy) clients. Even so, its funds’ are available in many, if not most countries in the world in varying degrees. This includes the United Kingdom, Europe and the United States and Canada, as well as most of South America and the Middle East.
It’s North American funds under management (FUM) is the company’s crown jewel, housing US$208.8 billion (or 56%) of the total FUM of US$374.8 billion (as of the 2019 annual report). Europe, the Middle East, Africa and Latin America account for another US$111.6 billion, with the Asia Pacific making up another US$54.4 billion in turn.
Why is Janus Henderson rocketing today?
Strangely, there is no immediately-obvious reason why Janus Henderson shares are rocketing today. There are no newsworthy announcements that the company has made recently, and certainly none with any earth-shattering, share price-moving potential that one would deem obvious.
However, if we dig a little deeper, something interesting does bubble up to the surface. Janus Henderson has been buying back its own shares. With gusto.
The company has posted a daily share buyback notice almost every trading day for months now. In fact, just today, the company did the same thing, telling the markets that the company has bought back and cancelled almost 4,000 shares. Same as yesterday, and the same as the day before that.
Perhaps investors (or one giant investor) have noticed.
Share buybacks are accretive to shareholder value. If a company buys-back its own shares, it reduces the pool of shares that its profits (and dividends) have to be split between. Thus, a share buyback increases the earnings per share that an investor can expect to receive from their investments. Even if the company isn’t actually growing its profits in the conventional manner. A buyback is often compared to a dividend in how it returns value to the shareholders.
It’s possible that these buybacks have led to the spike in Janus Henderson today. Or it’s possible that someone knows something good about the company that hasn’t been released to the markets just yet. Either way, it’s been a good day for Janus shareholders!
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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