ACCE Open Picks Mid-2026: PEP, ADBE, SPGI, LULU Reviewed

Halfway through 2026, the ACCE pick list carries ten open positions and one closed loss. The macro backdrop has been unforgiving for quality-growth names: rate expectations stayed elevated longer than consensus predicted, and several of the picks that looked cheapest on forward earnings got cheaper still before finding any footing. This is a straight accounting of where each position stands, what the data says now, and what the next catalyst looks like.

The One Closed Position: lululemon (LULU), Down 7.7%

lululemon athletica (LULU) is the only closed pick and it closed at a loss of 7.7%. The thesis was straightforward: zero debt, 57% gross margins, a brand with genuine pricing power, and a forward multiple that had compressed to under 10x. Two activists added an event-driven layer, and a June 25 board vote was supposed to be the near-term catalyst.

The board vote came and went without the structural change the market wanted. Year-over-year earnings fell 35.0% in the most recent period, and revenue growth of 4.3% is thin for a brand that used to compound at 20%-plus. The quality metrics remain real: ROE of 32.0%, net margin of 13.0%, FCF yield of 6.9%. But momentum is dead at 17/100, and the market is pricing in further deterioration. The lesson here is that activist involvement compresses the timeline for a catalyst that may not arrive on schedule. The underlying business is not broken, but the pick was wrong on timing.

The Deepest Drawdown: Adobe (ADBE), Down 46.7% Over 12 Months

Adobe (ADBE) is the most painful open position by trailing return. The stock has lost 46.7% over the past year and sits at a forward P/E of 8.3x, which is an eight-year low for a business generating 28.7% net margins, 62.9% ROE, and a 12.2% FCF yield. Revenue grew 12.7% year-over-year. The market's fear is that generative AI commoditizes creative software; the data says the business has not deteriorated.

The ACCE score sits at 64/100, with Quality at 96/100 and Value at 89/100. Momentum is 17/100, which reflects the price action, not the fundamentals. The analyst consensus target is $282.27. The CFO departure that triggered the most recent leg down was a sentiment event, not an earnings event. AI ARR has tripled to over $500 million. This is the pick where the gap between the business and the stock price is widest, and patience is the only tool available.

The Dividend Kings: PepsiCo (PEP) and S&P Global (SPGI)

PepsiCo (PEP) yields 4.1% at a forward P/E of 16.4x, near a multi-year valuation low. Year-over-year revenue grew 8.5% and earnings grew 27.8%. ROE is 43.9% and net margin is 9.2%. Elliott Management is pushing cost and portfolio actions, and a mid-July earnings print is the next hard date. The ACCE score is 62/100, with Growth at 68 and Quality at 72. The 1-year return is just 5.3%, which understates the income component but confirms the stock has gone nowhere while the business has compounded. The Elliott angle gives this a harder catalyst than most consumer staples positions carry.

S&P Global (SPGI) is down 17% year-to-date and carries a forward P/E of 20.8x. Year-over-year earnings grew 32.5% and revenue grew 10.4%. Net margin is 30.4% and FCF yield is 4.5%. The ACCE score is 58/100, with Quality at 86/100 and Growth at 76/100. Momentum is 17/100. The pick note referenced a July 1 spin catalyst priced 25% below consensus. That date has now passed, which means the market has had a chance to reprice the stub. The analyst target is $532.81. If the spin proceeds cleanly, the re-rating case strengthens into the back half of the year.

The Event-Driven Positions: MIDD, COO, DEO, PINS

Middleby Corporation (MIDD) completes its food-processing spin-off on July 6, leaving a higher-margin commercial-foodservice pure play. The 1-year return is 18.4% and the forward P/E is 17.9x. FCF yield is 7.1% and Momentum is 83/100. The spin is days away. This is the pick closest to its near-term catalyst, and the setup is clean: the market has not yet had to price the two entities separately.

The Cooper Companies (COO) trades at 15.2x forward earnings, about 26% off its high, with a formal strategic review underway. The most recent quarter beat by 0.1% and year-over-year earnings grew 26.9%. ROE is only 2.9%, which is the weakest quality metric in the book, but the strategic review could surface a takeout premium that makes the current multiple irrelevant. The ACCE score is 47/100; this is a lower-conviction position where the event, not the fundamentals, carries the thesis.

Diageo (DEO) was added this week. The stock yields 4.0% at a forward P/E of 12.6x, with Quality at 78/100 and Value at 75/100. Revenue fell 4.0% year-over-year, which is the core bear case: volume pressure across spirits categories. The bull case is that the brand portfolio is irreplaceable, the FCF yield is 5.8%, and FY results land on or about July 29. The 1-year return is negative 17.4%, which means the entry is at a multi-year low.

Pinterest (PINS) sits about 50% below its all-time high with Elliott engaged and a $3.5 billion buyback compressing the float. Revenue grew 17.8% year-over-year and FCF yield is 10.7%. The forward P/E is 11.7x. The ACCE score is 49/100, with Momentum at 17/100. The buyback is the mechanical support; Elliott is the strategic wildcard. The combination has worked before in similar setups.

The Newest Addition: Flowserve (FLS)

Flowserve Corporation (FLS) rounds out the open book. An activist with a margin-expansion playbook engaged a flow-control compounder that has already added 860 basis points of adjusted operating margin since 2022 and is targeting 20% by 2027. The 1-year return is 37.3% and Momentum is 77/100, making this the strongest price-action name in the portfolio. Forward P/E is 17.9x and FCF yield is 4.7%. The ACCE score is 57/100. The margin story has legs if management executes, and the activist presence keeps pressure on the timeline.

Where the Book Stands

Nine of ten open positions carry Momentum scores of 83 or below, and six sit at 17/100. The portfolio is explicitly contrarian: buying quality businesses at compressed multiples before a catalyst forces a re-rating. That strategy requires a longer holding period than momentum-driven approaches, and the LULU loss is a reminder that catalysts can fail to materialize on schedule.

The next hard dates are the Middleby spin on July 6, the PepsiCo earnings print in mid-July, and the Diageo FY results on or about July 29. Three catalysts in roughly four weeks will tell a lot about whether the thesis on the consumer and industrial names is playing out.