Charles River Laboratories: Headwinds Ahead But That's Okay

Summary:

- Charles River reported Q3 2019 results that were well-received by the market. The company beat on the bottom-line but slightly missed the consensus revenue estimate.

- Acquisitions and investments in operations are expected to be earnings headwinds over the next few quarters. However, I believe that the headwinds will be short term in nature.

- Long-term shareholders should consider staying the course because, in my opinion, CRL shares will outperform the broader market over the next 18-24 months.

Charles River Laboratories' ($CRL) stock has performed well lately but shares are still lagging the broader market by almost 4 percentage points over the last 11-plus months.

However, I believe that the underperformance has created a long-term buying opportunity because, in my opinion, Charles River's most recent operating results (and guidance) show that this Contract Research Organization ("CRO") company is well-positioned for 2020 and beyond.