Jensen Investment Management, an asset management company based in the US, released its fourth-quarter investor letter for “Jensen Quality Growth Equity Strategy”. A copy of the letter can be downloaded here. The S&P 500 Index continued its rally in Q4 2025, which started in 2022. The Jensen Quality Growth Equity Composite underperformed the Index in the fourth quarter. The Strategy returned -0.55% (net) in Q4 2025 Vs 2.66% for the Index. At the sector level, the portfolio’s relative underperformance was largely contributed to by the Industrials sector. The outperformance of low-quality stocks added to the relative underperformance from a quality perspective. Market concentration in mega-cap technology characterizes the current investment theme. The portfolio is well-positioned to capitalize on growth from AI and digital transformation, while maintaining its durability. The firm prioritizes holding companies that can generate economic value over multiple cycles, focusing on quality, cash generation, and durability for long-term shareholder returns. Please review the Portfolio’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Jensen Quality Growth Equity Strategy highlighted stocks like Eli Lilly and Company (NYSE:LLY). Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutic company headquartered in Indianapolis, Indiana that develops, manufactures, and markets human pharmaceutical products. On March 05, 2026, Eli Lilly and Company (NYSE:LLY) stock closed at $983.26 per share. One-month return of Eli Lilly and Company (NYSE:LLY) was -7.08%, and its shares gained 13.07% over the past 52 weeks. Eli Lilly and Company (NYSE:LLY) has a market capitalization of $880.036 billion.
Jensen Quality Growth Equity Strategy stated the following regarding Eli Lilly and Company (NYSE:LLY) in its fourth quarter 2025 investor letter:
“The leading individual contributors during the quarter were Eli Lilly and Company (NYSE:LLY) and Alphabet (GOOGL). Eli Lilly’s shares moved higher over the fourth quarter, supported by easing policy overhangs, strong underlying fundamentals, and continued pipeline execution. Early in the quarter, improved visibility around U.S. drug pricing and tariff policy reduced a source of uncertainty that had weighed on large-cap pharmaceuticals, contributing to a broader sector re-rating. Momentum was reinforced by Lilly’s late-October earnings beat and raised outlook, which underscored strong global demand for its incretin portfolio across both obesity and diabetes indications.
Sentiment improved further in November following Lilly’s announcement that it expects to submit its oral GLP-1 for global obesity approval by year-end, expanding the potential addressable market beyond injectable therapies. Pipeline momentum added to the positive backdrop, with Phase 2 data for next-generation incretin candidate eloralintide demonstrating compelling efficacy with a favorable tolerability profile. In parallel, renewed discussion around potential future Medicare coverage for obesity treatments— particularly those with demonstrated cardiovascular benefits— supported expectations for longer-term demand expansion in the U.S. Collectively, these developments reinforced confidence in Lilly’s leadership position and long-term growth runway.”
Eli Lilly and Company (NYSE:LLY) is in 16th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 137 hedge fund portfolios held Eli Lilly and Company (NYSE:LLY) at the end of the fourth quarter, up from 114 in the previous quarter. Eli Lilly and Company (NYSE:LLY) delivered strong results in 2025, with revenue rising 45% to $65.2 billion and fourth-quarter revenue grew 43%. While we acknowledge the risk and potential of Eli Lilly and Company (NYSE:LLY) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Eli Lilly and Company (NYSE:LLY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Eli Lilly and Company (NYSE:LLY) and shared a list of best GARP stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
