We evaluate opportunities for the Jensen Quality Value Strategy using fundamental research and various valuation tools. The Quality Value Strategy’s targeted end result is approximately 30-50 companies that have persistently high business returns and are undervalued relative to their business performance.
Our selection process pares down 4,000 publicly-traded U.S. companies, creating a focused universe of approximately 260 to perform further screening.
ROE greater than 15% for each of the last ten years as determined by the Investment Team
Market capitalization above $100 million
Primarily companies with market capitalizations less than the largest capitalization company included in the Russell Midcap® Index at the time of the strategy’s investment, although, to a limited extent, may include companies with higher market capitalizations
Quality + Value Screen
Identification of each company’s value relative to its business performance.
Criteria based on company-specific fundamentals and valuation are applied to the universe
Companies with strong fundamental businesses and attractive valuation are identified and monitored
A portfolio of 30-50 companies which we believe are undervalued relative to their business performance.
Emphasizes approximately one-third of the universe based on our own internal research and valuation
Position sizes vary based on analysis of potential return and risk characteristics
A company will be sold from the Jensen Quality Value Strategy if:
It no longer meets one or more of the criteria of the investment process
Its fundamentals deteriorate, lowering ROE below 15% on an annual basis, indicating a possible loss of competitive advantage
The Investment Team determines that another qualifying company has a better opportunity to achieve the strategy’s objective