Biotech tools stocks such as Charles River and Illumina are in a narrative-driven mania while their fundamentals haven't really moved. Charles River is ripping after reaffirming guidance for negative revenue growth this year. Illumina hasn't grown in five years, yet trades at over 50x earnings and 35x EV/EBITDA, with merely fine margins. Five straight years of easier comparisons are being sold as a coiled spring. x.com  x.com  x.com 

Significant discounts to broader pharmaceutical industry valuations on projected 2031 earnings make some high-quality mid-cap biotech stocks attractive. Many have cleared Phase 3 trials or reached more advanced stages, and some may reach profitability without more capital, an advantage if financing tightens. Selling these stocks to chase speculative biotech or large pharma at historically elevated multiples makes little sense. x.com 

Biotech stocks are breaking out of a five-year range because the threat from oil and interest rates was priced in years ago. Many of the most undervalued growth stocks are now in biotech, and research discovery is getting a boost from AI, making it perhaps the sector with most to gain from AI productivity. Charts support it: daily volume spikes have tended to mark major bottoms, the weekly held its quarterly averages to form a base, and the monthly shows a healthy pullback to the one-year EMA. … Show more

TransMedics still trades cheap against sector averages given its 20%+ growth, after the market overpunished its investment-heavy focus. Q3 numbers are very likely to impress with a strong growth acceleration, and since the market focuses on the short term, the stock should keep climbing in the coming months. Medtech has suffered without much justification as funds rotated into now-richer biotech, and capital should flow back over the next few years, lifting valuations after five negative years. … Show more

Fintech stocks are the counterintuitive trade as rates break out, rather than the usual oil and copper. Treasury yields are rising, but credit spreads are falling, which helps fintechs, while wider treasury spreads help banks. x.com  x.com 

Small- and mid-cap biotech looks like one of healthcare's more asymmetric setups after a four-year bear market, as AI speeds drug discovery and Big Pharma faces a patent cliff. Over $300B of pharma revenue goes off patent in the next few years, M&A is already ramping hard as pharma hunts for assets, and many small and mid-cap names still trade at reasonable valuations, making them potential takeover targets. x.com 

Fintech tops the list of over-punished sectors likely to offer some of the best opportunities over the next few years. Its 50-70% drawdowns reflect a sentiment and macro reset, not a fundamentals collapse, as higher rates, cooler retail trading and a shift to safer assets crushed multiples for SoFi, Robinhood, Affirm, Coinbase, Sezzle and PayPal. Meanwhile SoFi expects 30%+ revenue growth, Robinhood's engagement is rebounding and PayPal generates massive free cash flow. Not every name will win. … Show more

Biotech looks vulnerable relative to pharma if higher oil keeps rates higher for longer. United Airlines' CEO plans around $175 oil by the end of next year, Qatar expects five years to restore lost gas capacity, and one-year forward oil near $76 versus $98 spot may underprice the long recovery. Biotech is highly rate-sensitive and pharma much less so, yet pharma fell twice as much this month; that could reverse, with biotech hit as a risk asset while pharma falls less or even rises. x.com 

Biotech looks like a sector that wants to trend higher. Biotech M&A drove a heavy-volume weekly move to the top of a multi-month range; it just needs some help from the macro environment. x.com 

Twist Bioscience looks more like a bubble than an investment case, even though it could benefit as AI multiplies drug candidates and pushes value up the biotech chain. It led the 2021 biotech bubble and still loses money, so buyers pay for the story, not the business. The same AI thesis is simpler and cheaper to own in vertical market software, through serial acquirers such as Constellation Software and Topicus, which gain more acquisition targets as software gets cheaper to build. x.com