Merrill Downgrades Janus Capital to 'Neutral'

Analyst Guy Moszkowski cites the investigation of trading misdeeds, and disappointing assets

Merrill Lynch downgraded Janus Capital Group (JNS ) to neutral from buy.

Analyst Guy Moszkowski says he downgraded Janus after carefully considering the allegations surrounding the market timing issue of mutual-funds trading, and the disclosure of firm's August-ending assets under management, which he says are disappointing.

Mozkowski thinks the investigation by the New York attorney general could be lengthy, keeping a lid on share performance for some time. Despite the shares being inexpensive, he believes there's too many near-term issues for him to be a buyer. He says some long-term buyers may find the shares attractive, as Janus contains many elements of a turnaround.

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