Jensen Quality Growth Fund conference call video and slides for the third quarter ended September 30, 2018.
H/T Dataroma
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
Q3 hedge fund letters, conference, scoops etc
Investment Performance
average annual returns as of 9/30/18
Performance Attribution
by sector in 3Q18
Microsoft Corp
Investment Thesis
- Strong competitive advantages
- Network effect
- Scale
- High switching costs
- Compelling growth prospects
- Dominates enterprise cloud market
- Strong senior leadership and board
Oracle
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
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
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
Outlook
- Expectations heading into 4Q 2018 and beyond
- Economic and Market Dynamics
- Opportunities and Risks
