Jensen Investment Management, an asset management company based in the US, released its first-quarter 2025 investor letter for the “Jensen Quality Mid Cap Fund”. A copy of the letter is available to download here. The Jensen Quality Mid Cap Fund aims for long-term growth. The Fund returned -2.53% in Q1 2026, lagging the 0.60% return for the MSCI US Mid Cap 450 Index. Mid-cap stocks were flat in the quarter due to inflation, war, high energy prices, and cautious consumer spending. Rapid AI investment growth impacted the Index, boosting some stocks but hurting others, especially software and business services stocks facing AI disruption concerns. Energy stocks surged after the Iran War, challenging performance. The fund’s process focuses on high-quality companies with a 15%+ ROE for ten years, indicating sustained advantages. Quarterly performance benefited from underweights in the Financials and Communications Services and higher exposure to the Industrials sector, while underweight exposure in the Energy and Utilities sectors and overweight in Consumer Discretionary hurt performance. Please review the Fund’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Jensen Quality Mid Cap Fund highlighted The Kroger Co. (NYSE:KR) as a leading contributor. The Kroger Co. (NYSE:KR) is one of the leading supermarket operators in the United States. On May 11, 2026, The Kroger Co. (NYSE:KR) closed at $64.80 per share. One-month return of The Kroger Co. (NYSE:KR) was -3.56%, and its shares lost 3.99% over the past 52 weeks. The Kroger Co. (NYSE:KR) has a market capitalization of $41.01 billion.
Jensen Quality Mid Cap Fund stated the following regarding The Kroger Co. (NYSE:KR) in its Q1 2026 investor letter:
“The Kroger Co. (NYSE:KR) was the Portfolio’s third largest contributor to performance during the quarter. With approximately 2,700 stores located in 35 states and the District of Columbia, KR is one of the largest traditional supermarket operators in the U.S. We believe KR’s stock outperformed as the company reported solid margin and earnings improvement along with share gains during its most recent quarter. Like KEYS and ROST, KR remains a core holding in the Portfolio due to its economies of scale versus smaller competitors, the non-cyclical nature of demand for its products, and the prime location of many of its stores, which represents a difficult to replicate entry barrier.”
The Kroger Co. (NYSE:KR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 49 hedge fund portfolios held The Kroger Co. (NYSE:KR) at the end of the fourth quarter, compared to 55 in the previous quarter. While we acknowledge the risk and potential of The Kroger Co. (NYSE:KR) 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 The Kroger Co. (NYSE:KR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered The Kroger Co. (NYSE:KR) and shared the list of best undervalued stocks to buy under $100. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
