4-Star Stock Picker's Secrets

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):


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