The Jensen Investment Team Buys Position in Abbott
March 2025
The Jensen Investment Team added a position in Abbott (ABT) to the Quality Growth Strategy. Abbott is a global healthcare company with a medical devices division, complemented by diagnostics, established pharmaceuticals and nutrition businesses. Sales are geographically diversified, with 39% originating from the U.S. and 61% from international markets.1
Abbott benefits from a wide range of competitive strengths at both the company and segment levels. The company’s diversified business makeup helps mitigate risk associated with any single segment. Moreover, Abbott is a leading competitor in each of the industries it operates in, capitalizing on economies of scale, switching costs and brand equity.
The Medical Devices segment represents Abbott’s largest, fastest growing and most profitable division, featuring a broad product portfolio across the cardiovascular market. The company also has a diabetes care business, focused on continuous glucose monitors (CGMs) for monitoring blood sugar levels in diabetic patients. We believe the CGM market has substantial room for future growth, driven by increasing adoption and expanding reimbursement coverage. Beyond diabetes, Abbott is well positioned in other high-growth areas, including structural heart solutions and electrophysiology.
Abbott’s diagnostics business is characterized by a well-rounded product portfolio that includes diagnostic systems, rapid diagnostics, molecular diagnostics and point-of-care diagnostics. The segment benefits from high switching costs, recurring revenues and favorable secular tailwinds that enhance its long-term growth potential. While Abbott’s nutrition and established pharmaceuticals segments are the smallest, they play a critical role as portfolio diversifiers. Both segments are poised to benefit from growing demand in emerging markets, where Abbott has a dominant share in their primary operating regions.
Abbott recently qualified for our investable universe, and we believe that the company will be a strong addition to the Quality Growth Strategy given its high quality attributes, favorable growth outlook and attractive valuation.
1 Abbott 10-K as of 12/31/24
Strategy holdings are subject to change and should not be considered recommendations to buy or sell any security. Please click here to view a list of the 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 account 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
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