Jensen Quality Growth Equity Sells Amphenol Stake Amid Valuation Concerns

Jensen Quality Growth Equity has fully divested its holdings in Amphenol Corporation (APH), a leading manufacturer of interconnect products used in aerospace, defense, and high-performance computing. The decision, confirmed in early March 2026, was driven by the firm’s assessment that APH’s forward price-to-earnings ratio had reached 32.4x, significantly above the sector average of 24.1x for industrial technology firms. This level of valuation, the fund noted, no longer reflected sustainable earnings growth potential given projected revenue expansion of 6.3% year-over-year for FY2026, below historical averages. The divestment coincides with broader market shifts in the technology hardware sector, where the XLK Index has seen a 7.2% correction since January 2026 amid rising interest rate expectations and margin compression in component suppliers. Amphenol’s recent 18-month share price gain of 41% has contributed to investor caution, especially as the company’s operating margins—though still robust at 22.7%—have stabilized after a 200-basis-point expansion in 2023–2024. The exit may prompt portfolio reallocations across growth equity funds. With APH representing 2.1% of Jensen’s overall portfolio prior to the sale, the move could influence sector allocation decisions among peer funds tracking high-conviction tech and defense suppliers. The defense sector, represented by stocks such as Lockheed Martin (LMT), has seen marginal outflows as investors reassess risk-adjusted returns in the face of geopolitical uncertainty and rising cost pressures. Market impact remains contained for now, with APH trading flat on the day of the announcement, suggesting that the sell-off was anticipated. However, analyst sentiment has turned cautious, with three of five major firms downgrading APH to 'hold' from 'buy' in the week following the news. The stock now trades at a 15% premium to its 5-year median EV/EBITDA multiple.