Janus Adds More ‘Value’ to Lineup as ‘Growth’ Ebbs

Is “the Janus Way” subtly changing?

Some Janus funds, long known for their prowess with marquee-name tech shares and other highflying “growth” stocks, have recently taken big stakes in beaten-down non-tech names such as Ames Department Stores (ticker symbol: AMES).

Along with Ames, Janus reported in a recent federal filing that it has snapped up more than 10% of the stock of American Tower (AMT), North America’s largest broadcast tower operator, and a big stake in Mexican media company Grupo Televisa (TV).

What’s more, the firm recently announced plans to launch two “value” stock funds, Janus Advisor Global Value and an institutional version of it, Janus Aspen Global Value.

The firm launched the Janus Strategic Value fund, its first value-style fund of recent years, early in 2000. The fund is one of the firm’s few winners this year, with a gain of 5.4% so far.

Janus Chief Executive Tom Bailey said at the firm’s media round-table in December that he would not be surprised to see multiple value fund offerings in a few years because the company is always focusing on new ideas.

Though often considered synonymous with growth stocks, Janus has quietly enjoyed success in other investment sectors, such as “junk” bonds: The Janus High-Yield fund gained 2.5% in 2000 despite a slump in that sector, as manager Sandy Rufenacht beat the majority of his peers for the fifth straight year.

For their part, Janus stock fund managers say the “growth” and “tech” tags are overdone.

“One of the biggest misnomers about Janus is that we’re tech investors,” Janus Twenty manager Scott Schoelzel said at the round-table. “There are large positions in this firm that have nothing to do with technology.”

Adds Janus spokeswoman Shelley Peterson: “While the rest of the world thinks in terms of ‘growth’ versus ‘value,’ that is not how we think. The entire portfolio management team is continually seeking great companies with promising growth prospects that our research suggests have gone unappreciated by the broader market.”

To that end, “We develop new products by marrying our stock-picking talent with our shareholders’ needs rather than trying to ‘fill the style boxes,’ ” she said.

Schoelzel said that in the search for stocks, industry weightings “are almost residual in the process. What we’re trying to do is find interesting companies that are providing compelling products and services run by people that we have the utmost confidence in. And if that happens to be in the consumer products area, great. If it happens to be in retailing, great. If it happens to be in the biotech area, that’s great, too.”

Janus Mercury manager Warren Lammert acknowledged that tech is “a core competency in an area that we think is extremely important, and we’ve focused a lot of analytical research on it.” But, he added, “Going back to the ‘70s, I think Tom [Bailey] was very adept as an energy investor. And I think we’ve shown over time our willingness to go where the earnings and growth happen to be.”

Energy is one area in which Janus has stepped up its interest lately. Fund tracker Morningstar Inc. noted that Janus took new positions in a slew of energy names, including AES (AES), Anadarko Petroleum (APC) and BP Amoco (BP), in the fourth quarter.

In the tech area, Janus dumped Yahoo (YHOO), whose 86% loss last year was a drag on returns, but added to its fiber-optic stakes such as Corning (GLW) and JDS Uniphase (JDSU). But the latter bets have had dismal results so far this year.

Janus also added in the fourth quarter to some of the more traditional names it picked up in the third quarter, including Boeing (BA) and Goldman Sachs (GS), for example.

“Gradually, Janus appears to be doing two things: Working down their portfolio overlap [among different Janus funds] a bit, and adding some value,” said Russel Kinnel, Morningstar’s chief fund analyst.

Among the top 10 stock holdings at Mercury, Olympus and the flagship Janus fund, for instance, seven names overlapped as of Dec. 31, versus 10 at the end of 1999, Janus data show.

Still, sector weightings indicate that tech still dominates many Janus funds. At the flagship Janus fund, for example, tech and telecommunications stocks accounted for 71% of the portfolio as of Dec. 31; at Janus Mercury, 68%; at Janus Enterprise, 67%; and at Janus Twenty, 66%.

But at Janus Worldwide and Janus Special Situations, those two sectors combined accounted for less than 50% of assets at year’s end.