Jensen Quality Growth adds IDEXX Laboratories, cites 99% retention
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The Jensen Quality Growth Equity Strategy added IDEXX Laboratories as a new position, the fund said in its second-quarter 2026 investor letter. The fund highlighted IDEXX's 99% customer retention and roughly 90% recurring revenue as durable competitive advantages. The addition came even as Jensen's strategy trailed the S&P 500 in the quarter, returning 10.94% net of fees versus the index's 15.20%.
The Position
Jensen Quality Growth Equity Strategy initiated a holding in IDEXX Laboratories during the second quarter of 2026, according to the fund's investor letter. IDEXX, founded in 1983 and headquartered in Westbrook, Maine, provides veterinary diagnostic tests, practice management software, and water testing products. As of July 24, IDEXX shares closed at $544.32, giving the company a market capitalization of $42.94 billion. The stock has declined 4.57% over the past 52 weeks.
Durable Competitive Advantages
IDEXX benefits from a large installed base of instruments with high switching costs, resulting in 99% customer retention and approximately 90% recurring revenue. The company focuses on acute rather than optional veterinary tests, which reduces sensitivity to economic downturns. A very low-debt balance sheet and sustained R&D investment further reinforce its competitive moat.
What's Next
The fund's managers may seek additional holdings with similar recurring revenue models and defensive profiles, though it remains unclear whether the strategy can narrow its performance gap with the S&P 500 as AI-driven momentum persists.
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Jensen Quality Growth adds IDEXX Laboratories, cites 99% retention
