Weekly brief: 2026-10-10

The screen shows 12 BUY, 75 BUY* and 35 ON DECK names, but all six dossiers say WATCH or TOO HARD. The screen's top-ranked BUYs rest on 15% growth, trailing earnings that no longer exist, or cash-flow tests that do not fit lenders and insurers. Nothing is at tranche 1 today. The week is about LULU ($94.50 vs $90) and KNSL's Q3 report on 22 Oct.

Top actions

• LULU: review story. $94.50 vs tranche 1 $90 (5% away); new CEO reshuffling the C-suite, street mean $104.91. Not yet a buy. dossier, radar
• KNSL: hold; review after Q3 on 22 Oct. $336.98 vs tranche 1 $280. dossier
• ADBE: hold. $242.27 vs tranche 1 $225; CEO handover 1 Dec, interim CFO, unconfirmed green-card (PERM) headlines. dossier
• BRBR: hold; wait for the Q4 call in November. $8.55 vs tranche 1 $7; net debt ~3.8x guided EBITDA. dossier
• OPFI, QFIN: pass for now (TOO HARD). The screen ranks them first, but its prices are not owner earnings. OPFI, QFIN

Conflicts resolved

• ADBE: resolved for the dossier. Screen Sticker $537 assumes 15% growth; at ~10% it is ~$230 (METHOD 5).
• KNSL: resolved for the dossier. Screen uses OCF (insurer float) and GAAP EPS with investment gains; normalised Sticker is ~$282 (METHOD 5).
• LULU: resolved for the dossier. TTM EPS is flattered by a tariff refund; underlying Sticker is ~$46, not $364 (METHOD 5).
• BRBR: resolved for the dossier. Prices use pre-squeeze cash flow; Street EPS is -52% this year and debt is 5 years of FCF (METHOD 4, 6). The 2026-10-10 guidance-cut lesson applies.
• OPFI: resolved for the dossier. Lender OCF is not owner earnings, so Payback $66.64 and Ten Cap $48.95 mean nothing (METHOD 5-6; new lesson).
• QFIN: resolved for the dossier. Same lender flaw, plus a changed story and China political risk (METHOD 9).
• Minor Professor findings (no marker line for ADBE, KNSL, LULU) are queued for the analyst via the watchlist.

New and departing names

• Entered: DKS, LINC, PGNY, REX (BUY*, tier C), LAD (ON DECK, tier C). Reasons not checked; tier C, no dossiers.
• Left: GEN (BUY*), PCTY (ON DECK, tier A).
• Moved up to BUY*: AX, URBN (tier A), BLBD, SFM (tier B). PTC fell from BUY to ON DECK.

Radar this week

No PROBLEMs. Watch items, all unconfirmed:

• ADBE: PERM freeze headlines continue; hiring friction, no sell trigger touched.
• BKNG: FTC action over hotel ads still unconfirmed by the agency; $500M+ is small against FCF but touches the model.
• LULU: leadership overhaul draws mixed views.
• TTD: down 68% this year, below MOS ($11.95 vs $12.60). A writer cites "structural revenue deceleration". The value-trap question: moat breach or solvable event?
• SMCI: fell 7%; an 8-K item 5.02 and a new board member. Read the finance and audit roles.
• CRUS (-11% in 5 days), LDOS (JPMorgan cut, stock up 7%), PARR, SMID, TBBK: no cause found.

The street vs Rule #1

• TTD (contrarian): $12.08, mean $13.57 ($9-$20), MOS $12.60, Sticker $25.20. Analysts fear structural ad-spend loss; that may be a real problem, not an event.
• LULU (contrarian): $94.50, mean $104.91 ($44-$255), screen MOS $182.25, Sticker $364.50. The dossier's Sticker is ~$46; the wide target range shows the disagreement.
• HRB, MTG (contrarian): HRB $44.05, mean $51.67 ($36-$60), MOS $15.81, Sticker $31.62; MTG $27.43, mean $31.40 ($29-$35), MOS $9.16, Sticker $18.32. Both trade above Sticker, so "cheap" is doubtful; no dossiers.
• BRBR (agree): $8.55, mean $14.71 ($10-$20), screen MOS $21.30, Sticker $42.60. The dossier's prices are far lower; the street's agreement is no reason to raise them.
• STX, NBIX (crowded): STX $783 vs Sticker $180.60, mean $1,142; NBIX $142.44 vs Sticker $9.97, mean $207. Priced for good news; NBIX's Sticker looks like a data issue.
• Targets are leads and a ceiling on growth, never our value.

Guru moves

None this week.

Method and track record

Professor review: no major findings; six minor. Two lessons added: lender cash flow is not owner earnings (OPFI, QFIN), and rebase on forward earnings after a guidance cut (BRBR, OPFI, QFIN). This brief repeats neither mistake. Scorecard: 6 calls, none yet graded against the S&P 500; too early to say anything (judge process, not outcome).

Coming up

• 14 Oct LRN · 16 Oct NFLX, TRV · 21 Oct PHM
• 22 Oct KNSL (dossier name); GOOGL, RMD, DHI, ALLE, ENVA
• 23 Oct RLI, HRB · 26 Oct CINF · 27 Oct EXLS, INCY, MCRI, CB
• 28-30 Oct: BOOT, AON, SFM, WING, LAD, MTG, DECK, BYD, AX, META, JLL, UVE, CLMB, NMIH, ABG, NRIM, PTC, WAL, TTEK
• BRBR reports in early November; ADBE's CEO handover is 1 Dec.

Decisions for you

1. Lenders and insurers: stop ranking OPFI, QFIN, FUTU and similar at the top until valued on book or earnings? (/rulers/OPFI/)
2. QFIN: are you willing to own a China-based ADR at all? If not, we close it. (/rulers/QFIN/)
3. TTD: ask the analyst for a dossier next week on the 68% fall? (/radar/)
4. LULU: if it reaches $90, start tranche 1, or wait for ~$70 (tranche 2)? (/rulers/LULU/)

Research, not investment advice.