PORTLAND, Ore. (TheStreet) -- Rob McIver, manager of the Jensen Portfolio (JENSX) - Get Jensen Quality Growth J Report, says investors should consider drug stocks now that the government has passed the health care reform bill.
The $2.6 billion fund, which is rated five stars by
, has returned 42% during the past year, beating 62% of its large-cap value peers. The fund has gained 1% annually, on average, during the past three years, outperforming 85% of rival funds.
Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.
Where is the best place to find value in the market right now?
We are seeing a lot of value in the health care companies now that the health care debate has been clarified.
is one example. Abbott is a diversified health care company and has done very well with its Humira arthritis drug and its Zion stent. And of course it has a solid 3% yield as well.
Microsoft meets all of those high-quality attributes that we are looking for in a company. It's profitable and not all tech companies are. It has a tremendous amount of free cash flow that it devotes to reinvesting in its businesses, both its core businesses and its exciting future applications. And, of course, it has a nice yield and a good overseas exposure as well.
Emerson is well known in the emerging markets. It's a play on the infrastructure spend that we are getting in China, Latin America and the Middle East. It spends a lot of time and money getting to know its customers. When a factory or part is getting built, Emerson is generally the No. 1 company they will go to.
Is it all about growth in the emerging markets now?
The U.S. economy and the economies of Western Europe are probably going to take some time to get out of this economic recession we are experiencing. The emerging markets, provided you know your companies, offer a lot of opportunities.
Another company which has always been strong in the emerging markets, especially Latin America, is
. Do you still like that one?
Absolutely. It dominates the global marketplace for toothpaste. It accounts for 45% of the global market in toothpaste. It is No. 1 in the U.S. It's No. 1 in Latin America and in Mexico, where it has 85% market share. It has strong brands and the company is very careful to reinvest in those brands. And it has great overseas exposure with 70% of its revenues coming from overseas today.
Reported by Gregg Greenberg in New York
Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.