Motley Fool Money — "3 Broken Breakers Worth Buying"

Date: October 13, 2025
Host: Tim Byers
Guests: Rick Minares, Carl Thiel
Theme: Three “broken” rule breaker stocks that still have long-term potential, plus a discussion of federal layoffs' impacts on biotech and the “Yes, And” improv game featuring other stocks.

Episode Overview

This episode dives into the theme of "broken breakers"—innovative companies with strong underlying potential whose stocks have been battered, often for reasons the hosts believe are temporary or misunderstood. Tim Byers, Rick Minares, and Carl Thiel share three such stocks they believe are worth considering, analyzing the current headwinds and long-term prospects. The episode also opens with an important, up-to-the-minute assessment of how federal budget cuts and government shutdowns may affect the biotech industry, particularly in relation to the FDA and NIH funding. In the second half, the group plays their "Yes, And" improv investing game, stress-testing bullish ideas with constructive skepticism.

Key Discussion Points & Insights

1. Federal Layoffs & Biotech Industry Impact (00:40–05:51)

• Carl Thiel examines recent federal (CDC, HHS) layoffs and potential consequences for the biotech sector.
  • The FDA, crucial for drug approvals, is mostly funded by user fees, mitigating immediate shutdown impacts (01:20).
  • New Drug Applications (NDAs) that require user fees can't be submitted during a shutdown—could lead to delays if the shutdown drags (02:00).
  • "If you're trying to submit a new drug, you can't do it during the shutdown. ...The longer that drags out, the more serious that gets." (Carl, 02:10)
• NIH budget cuts are disruptive at the research funnel's top, but House and Senate have shown willingness to restore funding.
  • Example: fundamental research that seems obscure often leads to breakthroughs (GLP-1 for diabetes, for instance).
  • "You’re hurting the top of the funnel when you do that." (Carl, 03:46)
• Long-term outlook on emerging biotechs remains positive; near-term disruptions do not negate the enduring value of new science.
  • "There will be some, possibly some approval delays, but over the long term we still should like emergent science biotechs." (Tim, 05:03)

2. What Are “Broken Breakers?” (06:21–07:32)

• David Gardner’s "dark clouds we can see through" principle underpins the episode:
  • These are companies with strong “Rule Breaker” characteristics hit by temporary or exaggerated missteps.
  • Investing is not about timing the absolute low but about seeing through temporary pessimism.

3. Three Broken Breakers Worth Buying

a) The Trade Desk (TTD)

Introduction: 07:32 | Deep Dive: 07:35–09:56

• Stock down 63% from peak, after years of blockbuster growth; a 15-bagger since original Rule Breaker pick.
• Recent stumbles include missing revenue and profit guidance, plus fears about AI execution and competition (notably Amazon in Connected TV).
  • "The open Internet, it's a $935 billion market opportunity for digital advertising. It's never going to be a one-eats-all market."
  • "You can pick up The Trade Desk for less than 25 times forward earnings... it never trades this cheap." (Rick, 08:55)
• Viewpoint: While priced for imperfection, the business fundamentals remain strong; market overreaction has provided a contrarian opportunity.
  • "To be honest, I don't think it was ever truly broken. I think it was just, you know, too much optimism." (Rick, 09:54)

b) Bristol-Myers Squibb (BMY)

Discussion: 10:40–14:38

• A pharma giant with aging blockbuster drugs faces tough patent cliffs (notably for Eliquis, Opdivo).
• Shares predicted to see earnings and revenue decline, but these risks are acknowledged in the stock's ultra-low valuation.
  • "They have one of the worst patent cliffs in the industry... But I think that trouble's pretty well recognized at this point." (Carl, 11:16)
• Pays a hefty 5.6% dividend; 93 years of consecutive payments.
  • "It's a dividend that I think you can count on... They're not in danger of dropping out of profitability." (Carl, 12:29)
• Longer-term: Pipeline of new drugs is growing, and even a slight improvement in sentiment could boost the stock.
  • "Any sign that they're going to be able to return to growth will do that." (Carl, 13:56)

c) Progyny (PGNY)

Discussion: 14:42–20:04

• Stock is down 41% since the IPO, vastly underperforming the market, but business fundamentals show resilience and growth.
• Progyny specializes in fertility and family planning benefits for self-insured companies (like The Motley Fool itself).
  • "Gross profit increased 16%. So there's more efficiency here... the client base... expanded to 542... that's up year over year from 473." (Tim, 16:07)
• Expanding services (e.g., menopause support) are well received by existing/new clients.
• The leadership team is buying shares, signaling inside confidence.
  • "They are not selling shares. They've been, if anything, accumulators of shares." (Tim, 17:58)
• Risks/Concerns: Cyclical economic downturns could impact self-insured client base, but new services and demographic trends (delaying families) are long-term tailwinds.
  • "Couples are settling down later in life than they used to. And this means fertility treatment, surrogacy, adoption... are going to become more popular." (Rick, 19:38)

4. Yes, And: Stock Improv Game (21:57–27:24)

• Format: Each host builds on a bullish statement about a company, then adds a risk or concern.
• Featured companies and key points:

Argenx (ARGX) (22:54–24:22)

• Success with drug Vyvgart for Myasthenia Gravis—revenue up 97% YoY (~$4B run-rate).
• "Yes, but any market this good attracts a lot of competitors." (Carl, 23:40)
• High US sales concentration; regulatory/insurance headwinds possible.

Celsius Holdings (CELH) (24:26–26:11)

• Disruptive functional beverage leader, everywhere in the wild.
• Expanded globally, deepened PepsiCo relationship via Rockstar brand.
• "Yes, but Celsius risks cannibalizing its brands with this much larger portfolio..." (Carl, 25:42)
• U.S. revenue dropped 33% YoY, showing volatility in energy beverage demand.

Salesforce (CRM) (26:13–27:24)

• Massive adoption of new AI-focused products, strong guidance.
• Solid history of successful acquisitions.
• "Yes, but Salesforce is now trading for a premium... hard to justify as the AI hype starts to die down." (Tim, 26:53)
• Job cuts and growth slowing to single digits after decades of double-digit expansion.

Notable Quotes & Memorable Moments

• Carl Thiel (on NIH cuts):
  "You’re hurting the top of the funnel when you do that... that's where GLP-1 drugs come from—early, early research." (03:46)
• Rick Minares (on TTD):
  “The Trade Desk was once priced for perfection. Now it’s only priced for imperfection. But it’s also priced for infection. A lot of people just are doubting the Trade Desk. That’s a good place to go in and be a contrarian.” (08:40)
• Tim Byers (on Progeny):
  “Just because a stock is broken doesn’t mean the business is unnecessary—or broken. In fact, I think they are growing in importance.” (14:56)
• Carl Thiel (on Bristol-Myers’ dividend):
  "A 93-year history of paying a dividend—there’s no reason they’re going to stop doing that.” (12:14)
• Rick Minares (on demographic tailwinds):
  “Couples are settling down later... fertility treatment, surrogacy, adoption—all these things that Progeny helps out are going to become more popular.” (19:38)

Timestamps for Key Segments

• Federal Layoff/Biotech Q&A: 00:40–05:51
• Broken Breakers Theme & Rule Breaker Investing: 06:21–07:32
• The Trade Desk Analysis: 07:32–09:56
• Bristol-Myers Squibb Analysis: 10:40–14:38
• Progyny Analysis: 14:42–20:04
• Yes, And Game (Argenx, Celsius, Salesforce): 21:57–27:24

Language & Tone

Conversational, occasionally playful (“It’s raining in their boardroom and apparently it’s like an open roof. It’s a convertible boardroom because they’re getting soaked.” — Rick, 07:34), but consistently focused on providing investor insight and a long-term perspective.

Summary Takeaways

• The Motley Fool Money team argues persuasively that some companies punished by the market (“broken breakers”) present attractive, misunderstood opportunities for patient investors, provided the business fundamentals are intact.
• They caution that short-term shocks—be they regulatory (biotech), cyclical (healthcare), or sector-wide (tech, consumer beverage)—can depress prices more than prospects, offering contrarians a chance.
• As always, the hosts stress that listeners should do their own research and consider the broader market and company trends—not just the current cheapness of a stock—before investing.

Interested in long-term compounding and “dark clouds you can see through”? The hosts recommend David Gardner’s new book, Rule Breaker Investing, for further exploration of these principles.