4-Star Stock Picker's Secrets

Andrew Fisher
Tuesday, 10 Jun 2008 | 11:23 AM ET

Robert Zagunis says investors should put their money into shares of diversified international companies.

"They've got to be where the action is," he told CNBC.

For Zagunis to favor a company, it must also meet some strict standards: A return on equity of 15 percent or more per year for ten years; an increasing trend of free cash flow; and superb management.

His four-star Jensen Portfolio is up an average of 4.4 percent per year over the last three years.


His first pick is Automatic Data Processing .

"They've shed a couple of their slow-growing businesses recently," he noted. "They basically have accelerated their performance based on operating efficiencies based on investments in technology."

Also on his list is Johnson & Johnson.

"They've finally integrated the Pfizer consumer-health acquisition...faster than we expected, so we believe that the performance will actually accelerate," he said. "J&J is so strong that we think there is something major on tap for them; not quite sure what, but they have the horsepower to do it."

Zagunis also likes Wells Fargo.

Learn more: Watch the entire interview (video, below):

Diversified International Plays
A look at why diversified international companies are less susceptible to the U.S. economy, with Robert Zagunis, Jensen Investment Management co-portfolio manager


Robert Zagunis and his family own shares of ADP, Johnson & Johnson, and Wells Fargo.


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