Maybe Still a Misfit? Charles River Labs (CRL)

The unique medial research supply company is facing a tectonic shift in pharmaceutical research. Is it up to the challenge?

Torn Beteween Science and Marriage, Georg Melchior Krauss, circa 1775, oil on canvas Germanisches Nationalmuseum)

Perhaps it’s the Baader–Minhof phenomenon, but I feel like I have heard more mentions of Charles River Laboratories (NYSE: CRL) over the past 18 months than I can remember hearing in the preceding 10 years. Then again, I guess that can happen when a company’s stock catches the tailwinds of a speculative frenzy for new and novel biotech startups. The rapid rise and subsequent fall of the company’s share price has been a recent topic of conversation. The stock is starting to hit some historical valuation lows to boot.

Part of me thinks Charles River is the kind of company that doesn’t want a lot of attention. It doesn't want to advertise its role in drug development and medical research to the world. Its unique position in the market has made it a market-beating stock since going public in 2000, but it is a position that may not be as durable as it once was.

Let’s dig into Charles River Labs to see what it does, why its business may be under threat, what management is doing about it, and whether that will lead to favorable outcomes for investors.

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