Jensen Quality Growth Fund 3Q18 Conference Call

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Jensen Quality Growth Fund 3Q18 Conference Call

Jensen Quality Growth Fund conference call video and slides for the third quarter ended September 30, 2018.

H/T Dataroma

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Jensen Quality Growth Fund 3Q18 Conference Call Slide Deck

Jensen Quality Growth Process

Sell Discipline

Our sell discipline monitors the key tenets of our buy discipline: sustainable competitive advantages, growth, value creation and price.

We will sell a company if:

  • Company fundamentals deteriorate below our minimum business standard of a 15% return on equity on an annual basis, indicating a possible loss of competitive advantage
  • The market price of a business exceeds our estimate of full value
  • It is displaced by a better investment that allows an upgrade to the portfolio’s quality, growth outlook and/or valuation metrics

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Q3 hedge fund letters, conference, scoops etc

Investment Performance

average annual returns as of 9/30/18

Jensen Quality Growth Fund

Performance Attribution

by sector in 3Q18

Jensen Quality Growth Fund

Microsoft Corp

Jensen Quality Growth Fund

Investment Thesis

  • Strong competitive advantages
    • Network effect
    • Scale
    • High switching costs
  • Compelling growth prospects
    • Dominates enterprise cloud market
  • Strong senior leadership and board

Oracle

Jensen Quality Growth Fund

Investment Thesis

  • Solid competitive advantages
    • Scale
    • Technological leadership
    • Broad product portfolio
    • High switching costs
    • Strong financials
  • Growth ongoing despite slowdown in core markets

Omnicom Group

Jensen Quality Growth Fund

Investment Thesis

  • Strong competitive advantages
    • ‘One-stop-shop’ due to wide breadth of offerings
    • Strong creative reputation
    • Global infrastructure
  • Revenue diversification across geographies and customers
  • Holding company structure allows for nimble strategic execution

Cognizant Technology Systems

Jensen Quality Growth Fund

Investment Thesis

  • Global delivery model
    • Vertical integration
    • Processes built from the ground up advantageous over traditional IT services providers
  • Strong revenue, earnings and cash flow growth
  • Ongoing expansion of service offerings and solutions

Performance Attribution

by quality in 3Q18

Jensen Quality Growth Fund

Outlook

  • Expectations heading into 4Q 2018 and beyond
  • Economic and Market Dynamics
  • Opportunities and Risks

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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