The Idea Farm
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Biotech Bounceback

Biotech Bounceback

+ Richard Bernstein, Michael Cembalest, Michael Mauboussin, Craigslist & More

The Idea Farm
November 16, 2025

Sponsored by

“Valuation is the closest thing to gravity in finance. Eventually, everything is pulled back towards intrinsic value.”

— Michael Mauboussin

Research

MFS - Finding Large Opportunity in Midcaps (6 pages)

MFS argues midcaps sit in a compelling “sweet spot,” with broader sector diversification and less analyst coverage creating fertile ground for stock selection. They add that reasonable valuations and any reversal in today’s extreme market concentration could provide a tailwind for midcap performance.

Momentum factor investing: Evidence and evolution (47 pages)

The authors review momentum’s evolution and test it across 150 years and 46 countries, finding it is “sizable, robust, persistent, and fundamentally multi-dimensional".”

J.P. Morgan Asset Management - Eye on the Market (11 pages)

While the prior decade was defined by disruption in content distribution, Michael Cembalest believes the next decade will be defined by disruption in content creation, augmented by generative AI.

Morgan Stanley - Capital Allocation (88 pages)

Michael Mauboussin updates his 2022 study of how public companies in the U.S. spend money. This extends most of the analysis back to 1970, updates the data through 2024, and discusses results for the first half of 2025 where practicable.

The Rise of Alternatives (67 pages)

Juliane Begenau, Pauline Liang, and Emil Siriwardane examine why U.S. public pension funds have shifted heavily into alternatives, showing that consultant influence and return expectations—not risk appetite—primarily drove the move.

Bonus Content - Biotech

Meb’s latest podcast is with Chris Clark, who was a biotech PM for 10 years at RS Investments, managing $4.5 billion. They covered the complexities of the biotech sector, which has suffered a dramatic drawdown the past few years, and expanded on Meb’s episode a few months ago with D.A. Wallach and Dan Rasmussen.

Listen to Meb and Chris on Apple or Spotify.

Stifel - Biopharma Market Update (101 Slides)

Stifel’s latest biopharma update covers the state of the industry, M&A, capital markets activity, and updates on RNA therapeutics and primary care/preventative medicine.

Source: CapitalIQ and Stifel analysis. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange.

Source: CapitalIQ and Stifel analysis. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange. As of October 6, 2025.

EY - Focus on fundamentals to bounce back (34 pages)

EY analyzes the 2025 biotech landscape, finding revenues stabilizing while financing and M&A remain subdued. With IPOs scarce and follow ons weak, companies lean on alliances, cost control, and targeted AI to extend runways and reach milestones.

Sources: EY analysis, Capital IQ and company financial statement data.
Chart shows percentage of biotech companies with each level of cash. Numbers may appear inconsistent because of rounding.

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LOOK BEYOND JUST DIVIDENDS

Healthy, thriving businesses often have something in common: lots of cash flow.

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SYLD selects the top 100 companies each calendar quarter based on dividends and buybacks.
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SYLD will then equally weight each one of the selected companies in the portfolio to maximize diversification.

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Distributed by ALPS Distributors, Inc. Investing involves risk, including possible loss of capital. To determine if this Fund is an appropriate investment for you, carefully consider the Fund's investment objectives, risk factors, charges and expense before investing. This and other information can be found in the Fund's full or summary prospectus which may be obtained by calling 855-383-4636 (ETF INFO) or visiting our website at www.cambriafunds.com. Read the prospectus carefully before investing or sending money.