Ariel Investments Chief John Rogers Bullish on Two Asset Managers
“I think we’re fairly valued,” Rogers said. “I’d say we’re kind of in the fifth inning of this recovery, and the market still has a good ways to go as we get toward the end of the year,” he added.
With long and intermediate-term interest rates almost certain to rise, the signals are clear, according to Rogers. “You want to stay away from bonds,” he said.
Rogers agreed that investors who were underperforming and sitting on the sidelines due to perceived risks could create of flood of money into stocks towards the end of the year. “I think the biggest risk is missing out on a big upside rally that could surprise people,” he added.
Rogers provided two of his top stock picks, asset managers Blackstone (BX) and Janus (JNS).
Of Blackstone Rogers touted, “We think there’s so much value there—over $250 billion under management, such diversified assets in the different areas of the alternative-investment world.” He added, “we think it’s going to be a great long-term holding.”
Rogers wasn’t concerned that CEO Tony James had recently sold 1/5th of his position in BX.
Regarding the possibility of James leaving Blackstone Rogers said, “CEOs, they come and they go in this industry.” “You see it happen all the time in asset management. Assets are sticky, and as diversified as they are, with the professional management they have, the depth, the team that they have and the kind of leaders they have throughout the organization, it’s not dependent on one personality at all.”
Rogers considers Janus a value pick, saying, “the stock is very, very cheap. The stock has underperformed because they have underperformed,” adding that Janus had done “a great job” of diversifying and was poised to see its business pick up. “They’re going to surprise on the upside.”
Back in January Rogers was particularly bullish on the prospects for housing related, asset management and media companies and provided specific stock recommendations [link].