Weekly brief: 2026-10-17

The screen shows 13 BUY, 75 BUY* and 32 ON DECK names, but all six dossiers still say WATCH or TOO HARD, and nothing is at tranche 1. ADBE took two analyst downgrades and the Professor says its tranche 1 should be anchored to lower growth. KNSL reports Q3 on 22 Oct, and SMCI (new to BUY) lost its CFO on top of open integrity questions.

Top actions

• ADBE: hold; review story. $245.20 vs tranche 1 $225. HSBC and Wells Fargo downgraded on AI disruption; the dossier's Sticker is ~$230 (or ~$189 at the rule's 9.1% growth). Check the next ARR print. dossier, radar
• KNSL: hold; review after Q3 on 22 Oct. $365.24 vs tranche 1 $280, above all three corrected prices. dossier
• LULU: review story. $97.10 vs tranche 1 $90 (8% away); fabric team reorganised after quality complaints, CEO turnover is the trigger to watch. dossier, radar
• BRBR: hold; wait for the Q4 call on 3 Nov. $9.43 vs tranche 1 $7; net debt ~3.8x guided EBITDA. dossier
• SMCI: review story, no buy. New to BUY at $31.63, but the CFO left and the stock fell 22% in 5 days with an integrity question open (METHOD 4). Queued for a dossier. radar

Conflicts resolved

• ADBE: resolved for the dossier. Screen Sticker $537 assumes 15% growth; at ~10% it is ~$230 (METHOD 5). Professor: anchor tranche 1 to the lower-growth case or say why not.
• BRBR: resolved for the dossier. Screen prices use pre-squeeze cash flow; debt is about 5 years of FCF (METHOD 4, 6).
• KNSL: resolved for the dossier. Screen uses insurer OCF 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).
• OPFI, QFIN: resolved for the dossier (TOO HARD). Lender OCF is not owner earnings; QFIN also has a changed story and China risk (METHOD 5, 9).
• ADBE's minor Professor findings go to the analyst via the watchlist (ADBE, KNSL, LULU, TTD already queued; SMCI added).

New and departing names

• Entered: ORCL, CMC (BUY*); MU, NSSC, SKY (ON DECK). Reasons not checked; ORCL and MU are large and would need a dossier before any view.
• Moved up: SMCI to BUY (from ON DECK), BX to BUY*.
• Left: EPAM, URBN, RCMT (BUY*); LAD, TPB, TTEK, WING (ON DECK). Reasons not checked.

Radar this week

No PROBLEMs. Watch items, all unconfirmed:

• SMCI: CFO out at once, successor named, -10% day; contractor guilty plea in the AI-server export case. Read the 8-K for the CFO's reason (METHOD 4).
• ADBE: two downgrades; touches must-stay-true 1 and 3 (ARR growth, AI monetised). No sell trigger hit.
• LULU: fabric team reorganised; no sell trigger hit.
• TTD: at MOS $12.60 after a 68% fall; the value-trap question (moat breach or solvable event?) is open.
• NRIM: one $20M Specialty Finance loan impaired; check for more. HRMY: planned CEO handoff 1 Jan, second management change since July.
• CRUS, LDOS, PARR, BX, PGR, TRV: moves with no confirmed cause or unread results; all above MOS.

The street vs Rule #1

• SMCI (contrarian): $31.63, mean $42.27 ($15-$60), MOS $32.40, Sticker $64.81. Street split; the integrity question may be the real reason.
• ADBE (contrarian): $245.20, mean $272.31 ($195-$373), screen MOS $268.65, Sticker $537.30. Downgrades fear AI disruption; the dossier's Sticker is far lower.
• TTD (contrarian): $12.23, mean $13.53 ($9-$20), MOS $12.60, Sticker $25.20. Analysts fear structural ad-spend loss.
• KNSL (contrarian): $365.24, mean $346.22 ($264-$405), MOS $369.60, Sticker $739.20. Street sees it fully priced; our normalised Sticker is ~$282.
• ORCL, MU (agree, new): ORCL $128.23, mean $237.36 ($110-$400), MOS $27.22, Sticker $54.43; MU $878.84, mean $1,560.57 ($361-$3,000), MOS $513.22, Sticker $1,026.45. Wide ranges; ORCL trades far above its Sticker.
• STX, NBIX (crowded): STX $639.01 vs Sticker $180.60, mean $1,138; NBIX $135.71 vs Sticker $9.97, mean $206.81. 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 majors; one minor set on ADBE (tranche 1 anchored to the 10% case, price mismatch, SBC unconfirmed). One lesson added: anchor tranche 1 to the rule's lower growth rate, or name the reason for a higher one. This brief does that for ADBE. Scorecard: 6 calls, none yet graded against the S&P 500; too early to say anything (judge process, not outcome).

Coming up

• 22 Oct KNSL (dossier name); GOOGL, RMD, DHI, ALLE, ENVA · 21 Oct PHM · 23 Oct RLI, HRB
• 26-30 Oct: CINF, CB, BOOT, AON, SFM, MTG, DECK, AX, BYD, META, JLL, NMIH, NRIM, PTC, WAL
• 3 Nov BRBR; also PGR, BKNG, HRMY, LDOS, AMP · 5 Nov TTD, MELI, IBKR · 6 Nov BX
• ADBE's CEO handover is 1 Dec.

Decisions for you

1. Lenders and insurers: hold OPFI, QFIN, FUTU and PGR back from the top of the ranking 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. SMCI: ask the analyst for a dossier, or pass on integrity grounds? (/radar/)
4. ADBE: wait for tranche 1 at $225, or lower at ~$190 (the lower-growth case)? (/rulers/ADBE/)
5. LULU: if it reaches $90, start tranche 1, or wait for $70? (/rulers/LULU/)

Research, not investment advice.