The Jensen Investment Team Sells Position in Johnson & Johnson
July 2025
The Jensen Investment Team has sold all shares of Johnson & Johnson (JNJ), a long-term portfolio holding in the Jensen Quality Growth Strategy. Strong relative performance created an opportunity to take profits and reallocate proceeds to other high-quality companies with greater long-term return potential.
JNJ is a large, diversified healthcare company with global scale. Its pharmaceutical division is focused primarily on oncology, immunology, and neuroscience, while its medical technology business includes cardiovascular devices, orthopedics, and surgical solutions. These segments generate durable earnings and cash flow, supported by strong competitive positions and a robust R&D pipeline. JNJ has outperformed both the healthcare sector and the broader market year-to-date, and the company continues to exhibit solid fundamentals and defensive characteristics.
Despite JNJ’s strengths, the stock’s recent price appreciation diminished upside potential relative to our estimate of intrinsic value. In addition, ongoing talc-related litigation remains a meaningful overhang that could limit future upside. In keeping with our valuation discipline, we chose to take profits and reallocate capital to companies with greater long-term return potential and similarly strong defensive characteristics.
Strategy holdings are subject to change and should not be considered recommendations to buy or sell any security. Please click here for a listing of the Quality Growth Strategy’s current holdings.
The company discussion is solely intended to illustrate the application of our investment approach and is not to be considered a recommendation by Jensen. The specific security identified is taken from a representative accounts of the Jensen Quality Growth Strategy and does not represent all of the securities purchased and sold for the Strategy. Our views expressed herein are subject to change and should not be construed as a recommendation or offer to buy or sell any security and are not designed or intended as a basis or determination for making any investment decision for any security. Our discussions should not be construed as an indication that an investment in a security has been or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of any security discussed herein.
Certain information contained in this material represents or is based upon forward-looking statements, which can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of a client account may differ materially from those reflected or contemplated in such forward-looking statements.
This information is current as of the date of this material and is subject to change at any time, based on market and other conditions.
Jensen Investment Management, Inc., is an investment adviser registered under the Investment Advisers Act of 1940. Registration with the SEC does not imply any level of skill or training. Although taken from reliable sources, Jensen cannot guarantee the accuracy of the information received from third parties.
© 2025 Jensen Investment Management
Related Insights
Jensen News & Insights
For advisors looking to reduce concentration risk without adding excessive volatility, mid-caps may offer an elegant solution. Read article to discover why.
The Jensen Investment Team added a new position in Eli Lilly and Co to the Quality Growth Strategy due to its long runway for growth supported by strong fundamentals.
The Jensen Investment Team sold the Quality Growth Strategy’s position in UnitedHealth Group due to a significant shift in the company’s risk profile.
The Jensen Investment Team sold the Jensen Quality Growth Strategy’s position in PepsiCo due to uncertainty surrounding earnings, cash flow and revenue growth.
The Jensen Investment Team added a new position in Meta Platforms to the Quality Growth Strategy due to its competitive advantages and history of value creation.
Market volatility is rising. Factor trends show a shift from growth and momentum to value, cash flow and quality. Read our full analysis.