Fund companies' profits up, but share prices down

Shares of asset management companies fell with the broader market in afternoon trading Thursday even after several reported big earnings gains to close out 2009. Assets under management rose and inflows trended higher as investors started getting back into mutual funds. Still, FBR Capital Markets analyst Matt Snowling kept his "Market Perform" rating on Janus Capital Group Inc., and modestly boosted his price target to $13 from $12.50. He noted that inflows "remain limited" and one of Janus' units has continued to see net outflows. Janus' results met Wall Street's expectations, but Snowling noted that its strength came out of higher performance fees from market gains. The company remains dependent upon the market and signs of growth are limited, he wrote in a note to clients. Janus shares fell 17 cents, or 1.3 percent, to $13.01 in heavy trading. Deutsche Bank analyst Michael Carrier called flows into the funds at T. Rowe Price Group Inc. sluggish, and said they are "inline with industry trends." He kept a "Buy" rating and $57 price target on the stock. T. Rowe shares fell $1.90, or 3.6 percent, to $50.73. Shares of Franklin Resources Inc., the parent of Franklin Templeton Funds, fell $3.02, or 2.9 percent, to $100.86. Invesco Ltd. results missed Wall Street's expectations, and the stock recorded the biggest drop in the group. Noting that the company is close to completing its deal to purchase Morgan Stanley's retail asset management business, Deutsche Bank's Carrier kept a "Buy" rating on the stock, with a $26 price target. But he pointed to elevated expenses and money market outflows as concerns. Invesco shares fell $1.38, or 6.4 percent, to $20.31. Shares of BlackRock Inc., the largest asset manager, which posted strong results early Wednesday, dropped $6.55, or 2.9 percent, to $220.22. Lazard Ltd. was the only gainer in the sector. Shares added 46 cents, or 1.2 percent, to $39.64. The firm on Wednesday said it was bringing back Wall Street legend Felix Rohatyn as a special adviser as its chairman and CEO. The 81-year-old Rohatyn was with the firm for 50 years before leaving to become the U.S. ambassador to France under President Clinton.