In Healthcare: In this sector the fund is taking some money off the table “We sold off C.R. Bard (BCR),” explains McIver. “It is a low cost provider but we had concerns about their execution as a business. We saw better growth opportunities elsewhere.” One top holding is Varian Medical Systems (VAR), a leading designer of radiation therapy services and equipment. Given the unfortunate rise of cancer, the firm has a real sweet spot as the market provider. Their business model also bodes well for its continued success: When a customer (hospital) buys a product they also purchase upkeep and training for its staff, providing annuity down the road.Consumer Staples: There’s more opportunity here with brands and franchises, many of which are not new to the oversea markets. The Coca-Cola Company (KO), remains a favorite in that sense. According to McIver “North Korea and Cuba are the only two countries in the world where you can’t buy a coke. The strength of the brand and franchise is strong. The stock has high return on equity, rewards shareholders, grows their dividend, and has strong cash flow. As an investor, would you buy a 10-year U.S bond, which yields 1.65%, or Coke, with a dividend of 2.69%? Coke is clearly more attractive.” Technology: Amphenol Corp (APH) is a leading designer and manufacturer of electric connectors. It’s a commodity-like business but they have positioned themselves to work with customers like Apple (AAPL), as well as bigger aerospace industries where they design connectors to improve efficiency. “We think it’s fairly priced to buy today. It tends to be more volatile because the market treats it so, but it has a lot of value and more growth to price in.” Another technology stock in the fund is Waters Corporation (WAT), the leader in mass spectrometry. This is a process that measures and breaks down a substance’s compounds to identify and calculate all of its components. Healthcare companies have a great need for this technology, as do oil and gas companies which require this analysis for research. Lastly, Praxair (PX), a leading industrial atmospheric gasses company. “This is a real interesting play,” says McIver. “The firm builds and operates plants near customers that requires their gas. The business model is typically long-term contracts (3-20 years) with customers, which gives them a lot of security, so even if the customers don’t take the product they still have to pay, otherwise it would be too risky for Praxair to engage. Furthermore, the primary cost of its goods (air) is free. The by-products are other gasses that Praxair will bottle up and sell to another customer, while the first customer has essentially paid the industrial cost. Praxair plays on energy and the growing strength of the emerging markets, especially in Latin America where has seen a lot of success.” Advice for New Investors “Moving from one shiny thing to the next tends to be harmful to your financial health,” cautions McIver. “Risk is very much a word investors are concerned about. To us, risk is the permanent loss of capital. Our strategy is proven over time, with lower volatility and superior returns, but it takes patience. An investor must understand the strategy and stick with it because in the long term, it tends to be successful.”
Mertens adds: “People tend to look at near-term returns or headlines, but investors need to think about the long-term results. Look how the stock or fund performs over a full market cycle, and see how they add value.”Business Section: Investing Ideas Looking to emulate Jensen Quality Growth Fund’s (JENSX) investing strategy? We list the fund’s top 20 holdings below. The Jensen Quality Growth Fund is based in Lake Oswego, Oregon. Total assets under management for the firm, Jensen Investment Management, is $5.5 billion. Roughly $4 billion of that is in the Quality Growth Fund. List sorted by % of portfolio. 1. PepsiCo Inc ( PEP): Engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. Market cap at $108.6B, most recent closing price at $70.21. Represents 5.30% of fund’s portfolio 2. Procter & Gamble Co ( PG): Provides consumer packaged goods in the United States and internationally. Market cap at $192.B, most recent closing price at $70.22. Represents 5.25% of fund’s portfolio. 3. Oracle Corp ( ORCL): Develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide. Market cap at $154.55B, most recent closing price at $32.07. Represents 5.12% of fund’s portfolio. 4. 3M Co ( MMM): Operates as a diversified technology company worldwide. Market cap at $64.39B, most recent closing price at $91.87. Represents 4.85% of fund’s portfolio. 5. United Technologies Corp ( UTX): Provides technology products and services to the building systems and aerospace industries worldwide. Market cap at $74.25B, most recent closing price at $81.01. Represents 4.56% of fund’s portfolio. 6. Abbott Labs ( ABT): Engages in the discovery, development, manufacture, and sale of health care products worldwide. Market cap at $103.27B, most recent closing price at $65.33. Represents 4.33% of fund’s portfolio.
7. Colgate Palmolive Co ( CL): Together with its subsidiaries, manufactures and markets consumer products worldwide. Market cap at $50.46B, most recent closing price at $106.79. Represents 4.02% of fund’s portfolio.8. Adobe Sys Inc ( ADBE): Operates as a diversified software company in the Americas, Europe, the Middle East, Africa, and Asia. Market cap at $17.7B, most recent closing price at $35.75. Represents 3.80% of fund’s portfolio. 9. Microsoft Corp ( MSFT): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $226.74B, most recent closing price at $26.94. Represents 3.79% of fund’s portfolio. 10. Automatic Data Processing Inc ( ADP): Provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers worldwide. Market cap at $27.83B, most recent closing price at $57.33. Represents 3.79% of fund’s portfolio. 11. Omnicom Group ( OMC): Omnicom and its subsidiaries provide advertising, marketing, and corporate communications services. Market cap at $13.05B, most recent closing price at $49.41. Represents 3.75% of fund’s portfolio. 12. Accenture PLC ( ACN): Operates as a management consulting, technology services, and outsourcing company. Market cap at $55.91B, most recent closing price at $69.51. Represents 3.50% of fund’s portfolio. 13. T. Rowe Price Group Inc ( TROW): A publicly owned asset management holding company. Market cap at $16.33B, most recent closing price at $64.06. Represents 3.49% of fund’s portfolio. 14. Emerson Electric Co ( EMR): Operates as a diversified manufacturing and technology company. Market cap at $37.1B, most recent closing price at $51.23. Represents 3.46% of fund’s portfolio. 15. Waters Corp ( WAT): Designs, manufactures, sells, and services high performance liquid chromatography, ultra performance liquid chromatography, and mass spectrometry (MS) instrument systems and support products primarily in the United States, Europe, Japan, and Asia. Market cap at $7.48B, most recent closing price at $86.0. Represents 3.34% of fund’s portfolio.
16. Cognizant Technology Solutions ( CTSH): Provides information technology consulting and technology services in North America, Europe, and Asia. Market cap at $21.3B, most recent closing price at $70.97. Represents 3.33% of fund’s portfolio.17. Praxair Inc ( PX): Engages in the production, sale, and distribution of industrial gases primarily in North America, South America, Europe, and Asia. Market cap at $32.04B, most recent closing price at $107.84. Represents 3.05% of fund’s portfolio. 18. United Parcel Service Inc ( UPS): Provides transportation, logistics, and financial services in the United States and internationally. Market cap at $70.29B, most recent closing price at $73.68. Represents 3.04% of fund’s portfolio. 19. Amphenol Corp ( APH): Engages in the design, manufacture, and marketing of electrical, electronic, and fiber optic connectors; interconnect systems; and coaxial and specialty cables worldwide. Market cap at $9.93B, most recent closing price at $61.90. Represents 2.85% of fund’s portfolio. 20. Equifax, Inc ( EFX): Equifax collects, organizes, and manages various financial, demographic, employment, and marketing information solutions for businesses and consumers. Market cap at $6.48B, most recent closing price at $54.20. Represents 2.83% of fund’s portfolio.
Compare changes in 1-year return, over the past 2 years, for the first 9 companies on this list. Click through for more tools and data.
- Access a performance overview for all stocks in the list