Financials Dominate Ariel Investments’ Top Holdings

Ariels’ fourth largest holding is Interpublic Group of Companies (NYSE:IPG), an international advertising, communications, and marketing services concern. IPG continues to grow their advertising revenue streams with acquisitions, but their purchases have gone on to impact the growth of revenue and earnings, pushing them into negative territories versus the same quarter a year ago. In spite of this, sell-side analysts remain overly bullish about IPG, and out of twenty-one analyst ratings, seventeen remain in the buy territory. David Harding of Winton Capital Management recently initiated a new position in IPG (see who else is jumping in this stock here).

Ariel’s last top five holding is in another financial, Janus Capital Group (NYSE:JNS). This investment manager has a large exposure to equity strategies, which can cause investors to flee during periods of poor market conditions and poor performance. Lackluster earnings in 2012 brought on negative responses from ratings houses, including multiple “Sells” from the bulge brackets like Goldman Sachs and Morgan Stanley. Growth is dismal and future price targets are gloomy; we would stay away from this asset manager in lieu of others with better fund performance and investor loyalty.

Disclosure: I do not own shares of any stocks mentioned in this article.