Morning Watchlist: Monday Edition
A quick note from Behind the Markets
It's the start of another week. And today we're looking at one of the wildest things we've seen on a stock screen in years.
On Wednesday, Moderna nearly tripled. Up 176% in a single day. Thursday, it fell 25%.
Eighteen billion dollars of market value — gone between breakfast and the closing bell.
When a stock moves like that, everybody asks the same question: should I chase it?
Wrong question.
The right question is the one we ask every morning here. Who wins quietly while the crowd fights over the loud stock? Four stories this morning. Four pairings. Let's get into it.
1) The Loudest Stock in the World
First, what actually happened.
Moderna and Merck announced trial results for a personalized cancer vaccine — an mRNA shot, custom-built for each patient, paired with Merck's immunotherapy drug Keytruda.
In melanoma patients, the combination significantly extended the time people lived without their cancer coming back. Bank of America called it a "watershed moment" and raised its price target from $40 to $170.
This is real science, and it may become one of the great medical stories of the decade. But here's the thing about watershed moments. The market prices them in hours, then argues about them for years. Up 176% Wednesday. Down 25% Thursday.
That's a crowd changing its mind twice in 48 hours. So step back and think about what has to happen if personalized mRNA cancer vaccines become real medicine. Somebody has to manufacture millions of custom doses. And every one of them — whoever's name is on the vial — gets made with the same filtration systems, the same chromatography columns, the same single-use consumables.
The pairing: Repligen (RGEN) — Watch
Repligen sells the equipment and consumables that biologic drugmakers — including the entire mRNA field — need to make their products. It's the flour seller in a town that just announced a baking contest. It doesn't matter which bakery wins. The flour gets bought either way.
Second-quarter earnings beat expectations, revenue is growing 16%, and the company just agreed to buy BioLife Solutions for $1.5 billion to push deeper into cell therapy.
So why Watch and not Buy? Price. At about $180, Repligen trades near 80 times next year's expected earnings. (That's the "forward P/E" — what you pay today for each dollar of profit expected next year. The S&P 500 costs about 21.) Great business. Expensive ticket. If the Moderna froth settles and this one pulls back, move it up your list fast. A biotech funding freeze — or the cancer data failing to hold up in larger trials — kills the setup.
2) The Tractor Company Rang a Bell
They say nobody rings a bell at the bottom of a cycle.
Yesterday, somebody did.
Deere reported earnings, beat expectations, raised its full-year profit forecast to as much as $5 billion — and the stock jumped 7%, the best performer in the S&P 500.
But the number wasn't the story. CEO John May stated: "2026 will mark the bottom of the current ag equipment cycle." The bottom. Farm equipment has been in a brutal slump — U.S. tractor sales are down 13% this year, and Deere's own agriculture segment is still shrinking. Deere rode it out because its construction business picked up the slack. Now think about the companies that don't have a construction business to hide behind. The pure-play farm equipment makers took the full force of the downturn. Which means, if May is right about the bottom, they get the full force of the recovery too.
The pairing: AGCO (AGCO) — Buy
AGCO makes tractors and combines under brands like Fendt and Massey Ferguson. Market cap: about $7.3 billion. Almost pure agriculture.
The stock rose 4.5% yesterday on Deere's coattails — and at about $104, it still trades at roughly 14 times earnings, with Wall Street's average price target up at $123.
Buying a farm equipment stock at the bottom of the cycle is buying a snowblower in July. Nobody wants it. That's exactly why it's cheap. And you're not buying it for July. You're buying it for winter — which Deere just told you is scheduled for 2027. The risk, plainly: AGCO trimmed its own full-year guidance three weeks ago, so the recovery is Deere's forecast, not yet AGCO's results. If grain prices roll over or the rebound slips past 2027, the snowblower sits in the garage another year.
3) Gold Crossed a Line It's Never Crossed Before
Quietly, while everyone watched Moderna, gold did something it has never done. It topped $4,500 an ounce for the first time in history.
It's up more than 3% this week, ahead of new Fed Chair Kevin Warsh's debut speech at Jackson Hole at the end of next week. Here's what we keep coming back to. When the price of milk goes up, the dairy farmer's profit goes up faster. The cows cost the same. The barn costs the same. Every extra dollar of milk price falls almost straight to the bottom line. Gold miners are dairy farms. And milk just hit an all-time high.
The pairing: Eldorado Gold (EGO) — Buy
Eldorado mines gold in Canada, Turkey, and Greece. Revenue is up 29% over the past year. Earnings per share are up 42%. And the stock trades at about 9 times next year's expected earnings. The S&P 500: 21 times.
A business growing earnings 40%-plus, priced at nine. CIBC upgraded it this month, saying the company is approaching "a free cash flow inflection point with gold prices strengthening."
Full disclosure: the stock has already had a big run, it missed last quarter's estimates, and the average analyst still rates it a Hold. That's often what the crowd says right before earnings close the gap. The honest risks? A hawkish Warsh speech that knocks gold off its record, or another operational stumble at the mines.
4) The Consumer Isn't Dead. They're Bargain Hunting.
Shoppers have been sliding down the price ladder after Walmart's miss.
Last night, Ross Stores proved it. Sales up 13%. Same-store sales up 10%.
Read that again — Walmart grew comparable sales 2.6% and got punished; Ross grew them 10%. The stock jumped 8% after hours as management raised full-year guidance. And the CEO credited "an increase in new customers" — people walking into off-price stores who weren't there before.
The trade-down isn't a blip. It's a migration. So who's next in line to report? Burlington Stores — the third leg of the off-price triangle with Ross and TJX — reports this Thursday, August 27th.
The pairing: Burlington Stores (BURL) — Watch
Burlington runs over 1,000 off-price stores and grew earnings 19% over the past year.
So why not buy it today?
Because the market already knows this story. At around $338, Burlington costs about 28 times next year's earnings. Paying a full-price multiple for an off-price retailer defeats the purpose. Ross's blowout will pull expectations even higher into next week's report. If Burlington stumbles over that raised bar and the stock sells off, that's your entrance. A miss you can buy is worth more than a beat you have to chase. And if it beats and keeps running? We let it go. There's always another rack.
Before You Go
That's the watchlist. A tripling biotech, a bell at the bottom of the farm belt, a record gold price, and a bargain migration. One theme, as always: the best opportunities stand one step behind the headline.
Have a wonderful day.
We'll see you tomorrow.
Found this helpful? Share it with others.
Written by Behind the Markets