Adobe carries a 12% free cash flow yield on 2027 numbers and is still growing its top line at double digits, on Samantha McLemore's reading.
The bear case on Adobe is the easiest one in software to state: if a model can do the work, who opens the software. Her argument is that the ease of stating it is exactly why the price is where it is.
"And Adobe was our favorite idea when we really dug in because as you say, everyone can see the problems there, which means the price is extraordinarily depressed."
McLemore founded Patient Capital Management and runs its flagship Patient Opportunity Trust, which the anchor introduced as up 14% this year and outperforming the S&P.
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👤 Guest: Samantha McLemore, Founder and Chief Investment Officer at Patient Capital Management
🎙️ Host: Kelly Evans, who anchors The Exchange on CNBC
📰 Published: 14 September 2026 on CNBC's The Exchange
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 4 min
Key Takeaways
A 10-year above 5% is a psychological level rather than an investor problem, in her framing
She still calls this a bull market and says 20 times earnings is not expensive
The leadership has been momentum and AI, and she has hyperscaler exposure, but that is not what drove her year
Health care carried the fund's performance, bought at 50-year relative valuation lows
High single-stock volatility is the condition she wants, because it is what creates the opportunities
Her favorite idea now is QXO, on the record of the man running it rather than on the roofing cycle
Two of his previous companies rose between 5 and 50 times, and she is underwriting 5 to 10 years
Adobe is cheap because the bear case is obvious, and the business is not yet showing the damage
A 12% free cash flow yield on 2027 numbers, with double-digit top-line growth and a shift to a freemium model
1. A Bull Market at 20x
Kelly Evans opened on the level everyone was watching — "The ten year treasury yield jumping above 5% today for the first time since 2023, as the market braces for a possible rate hike this week" — and framed McLemore's position as that it is an important psychological level but not a problem for investors just yet. She then read out an unusual holdings list, naming CVS, UnitedHealth Group and Norwegian Cruise Line alongside AI names, and asked whether the fund's year is a market view or a stock-by-stock one.
McLemore's answer was both, and the market half is unambiguous: "Both. I mean, I think we think that we're in a bull market. And so we still think the market's you know at 20 times earnings is not expensive."
She separated the market's leadership from her own: "It has been very momentum led with the AI plays. And we have some exposure there with the hyperscalers."
The method she described is the one the firm's name implies: "And that's what we like to do, find great companies under pressure and invest for the long term."
2. Health Care Did the Work
The performance attribution is the part that does not match the tape.
"But actually our performance year to date has been driven mostly by these health care plays, which were extraordinarily cheap a few years ago at 50 year relative valuation lows," she said
Evans asked whether that success starts a conversation about paring back, and whether anything in the portfolio now looks out of whack on price
Her answer was that the thesis has not run out: "Yes. So we're not trying to time the market, and we still think a lot of those health care companies are undervalued, but we're finding a lot of great values in the market still."
The market condition she wants is dispersion rather than direction: "And with the single stock volatility so high, that's great for stock pickers like us who find these opportunities."
3. QXO and the Jacobs Playbook
The idea she volunteered when asked what she likes now is a roll-up rather than anything in health care or AI.
"So a lot of names have been under pressure from the move up in rates. So one of my favorite ideas now is QXO, which is Brad Jacobs' most recent company. And that's been under pressure lately," she said
The underwriting is explicitly about the operator's record: "But we his past companies, XPO Logistics, United Rentals were up between 5 and 50 times. And he's using the same playbook. And we see that kind of potential here over the next 5 to 10 years."
Evans went for the obvious objection and asked about high fuel prices. McLemore accepted the near-term drag: "No. I mean, it all weighs on, you know, spend in the short term. So I think roofing spend was depressed and that's been weighing on the company high rates, high gas prices."
Her reply is a duration argument rather than a denial: "But I think the company has enough fundamental drivers that they can power through that over the long term. And that's really what we're focused on."
4. Adobe's 12% FCF Yield
Evans said Adobe really caught her attention, and put the bear case bluntly: in an AI world, who is using Adobe to do anything, and the stock has struggled even while the software trade recovered.
McLemore did not argue with the premise. "Software is obviously been under pressure. So that's an area where we've spent a lot of time doing work," she said
The visibility of the problem is the reason for the position: "And Adobe was our favorite idea when we really dug in because as you say, everyone can see the problems there, which means the price is extraordinarily depressed."
The numbers she gives against that price: "It has a 12% free cash flow yield on 2027 numbers. It's still growing top line double digits."
"So for all the people saying that we can see the issues, it's not showing up in the business, at least at the top line growth rate yet."
She did not dismiss the risk: "I agree that they, you know, there are risks there. There are risks for all the software companies."
On management's response: "I think what Adobe is doing is exactly the right move. They've shifted the model." The specific change is a freemium model, where she says there are great early signs of success
5. Chime, Bitcoin, Coinbase
Evans moved to two more names, describing Chime as having a Costco model of sharing the benefits of scale, and noted that there is not much crypto in the portfolio.
The crypto answer was that there is some, and it is a conviction holding rather than a hedge: "We own it. We own Bitcoin. We own Coinbase. We're big fans of those still. So we're very optimistic."
She added that both were strong performers that day
On the newest position, she said Chime is a newer name that came public recently
Bonus Insights
The holdings list is the story the segment does not tell. Evans read out CVS, UnitedHealth Group and Norwegian Cruise Line in one breath as names you would not usually expect together, and McLemore's explanation — health care bought at 50-year relative valuation lows — covers only part of it.
Evans' own framing of the fund's year was superstitious rather than analytical: she said she did not want to jinx it, then immediately said the performance is not an accident but by design.
The Adobe exchange is the one place the host argued the bear case herself rather than sourcing it, saying that even she can see it.
McLemore's bottom line is that a 5% 10-year does not change the job: buy the companies where the problem is obvious and priced, which right now means depressed health care, a roll-up under rate pressure, and the software name everyone has already written off.
Products, Companies & Tools Mentioned
Adobe (Her favorite software idea: a 12% free cash flow yield on 2027 numbers, double-digit top-line growth, and a shift to a freemium model she says is showing early success)
QXO (Brad Jacobs' most recent company and one of her favorite ideas now, under pressure from rates and depressed roofing spend)
XPO Logistics and United Rentals (The previous Jacobs companies she says rose between 5 and 50 times, and the basis for underwriting QXO over 5 to 10 years)
CVS Health, UnitedHealth Group and Norwegian Cruise Line (The holdings the anchor read out as unusual; the health care names are where McLemore says this year's performance came from)
Chime (A newer position, which the anchor described as having a Costco model of sharing the benefits of scale)
Coinbase (Held alongside Bitcoin; she says the firm remains a big fan of both and both were strong that day)
Patient Capital Management (Her firm, whose flagship Patient Opportunity Trust the anchor introduced as up 14% this year)
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