Janus Guys Stick to Their Guns

After another tough year, a few Janus fund managers told reporters they're not changing their research process, though they are trying to look more closely at the companies they own.

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On Thursday morning a gaggle of folks from the Denver fund shop met with reporters in midtown Manhattan, including veteran portfolio managers Scott Schoelzel ((JAVLX Quote)Twenty) and Warren Lammert ((JAMRX Quote)Mercury). They didn't dismiss the past year's drubbing or proclaim the pain over, but they did say they aren't changing their stripes.

"Needless to say, it's been a difficult 15 to 18 months, but we haven't been knocked off our game," said Schoelzel, whose Twenty fund is down 38% over the past year. "We will be back, I guarantee it," said Janus chief executive and founder Tom Bailey.

Most of the Denver firm's tech-heavy stock funds' returns rose and fell with the Nasdaq bubble, taking millions of individual investors along for a ride neither pleasant nor profitable. Most of the firm's stock funds still boast solid long-term track records, but many investors bought their shares in the past three years and have been in the cross hairs of a sluggish economy and stock market. Among Janus' 10 biggest stock funds, just one is beating its average peer ((JAGIX Quote)Growth & Income) and just one is beating the S&P 500 ((JABAX Quote)Balanced).

The firm's research style, depicted in numerous television and print ads, blends number crunching with grass-roots investigation. Managers and analysts typically sift the market for companies that are growing quickly and look cheap today relative to the amount of free cash flow they'll churn out in the future. Then they use interviews with a company's management, customers and competitors to develop a broader sense of a business' strengths and weaknesses. On Thursday, Schoelzel mentioned an analyst covering Walgreens who worked in a store for a week. ...