Charles River Laboratories: Strong Results But Not Out Of The Woods Just Yet

Summary:

- Charles River reported Q2 2020 results that beat the top and bottom line estimates. However, the company's research business contended with strong headwinds again this quarter.

- The COVID-19-related headwinds will likely continue to impact Charles River's results in the near-term, but the company is still well-positioned for the future (the revised 2020 guidance proves it).

- This small-cap drug discovery and early-stage development company has a great long-term story to tell. Additionally, I believe that the company's investment thesis keeps getting stronger.

Charles River Laboratories' ($CRL) stock has performed well so far in 2020, as CRL shares are outperforming the broader market by ~35 percentage points over the last 8 plus months.

And it helps the bull case that the company's Q2 2020 results were well-received by the market, even after considering the fact that COVID has negatively impacted several industries that Charles River operates in. In my opinion, the investment thesis for this contract research organization remains intact.