March 14, 2024
Top 10 Stock Charles River Laboratories Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Charles River Laboratories – Top 10 Stock in Employee Health Leaders in the United States
Charles River Laboratories is listed as a top 10 stock on March 14, 2024 in the market index Employee Health US because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 66 (high 66% performer), Obermatt assesses an overall buy recommendation for Charles River Laboratories on March 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Life Sciences Tools & Services |
| Index | Employee Health US, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Charles River Laboratories Buy
| 360 METRICS | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 66 |
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ANALYSIS: With an Obermatt 360° View of 66 (better than 66% compared with alternatives), overall professional sentiment and financial characteristics for the stock Charles River Laboratories are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Charles River Laboratories. The consolidated Value Rank has an attractive rank of 50, which means that the share price of Charles River Laboratories is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 50% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 65, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 92. But the company’s financing is risky with a Safety rank of 18. This means 82% of comparable companies have a safer financing structure than Charles River Laboratories. ...read more
RECOMMENDATION: With a consolidated 360° View of 66, Charles River Laboratories is better positioned than 66% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 50), above-average growth (Growth Rank of 65), and positive market sentiment in the professional investor community (Sentiment Rank of 92), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 18), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Charles River Laboratories is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Charles River Laboratories very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Charles River Laboratories is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Charles River Laboratories. Analyst Opinions are at a rank of 30 (worse than 70% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 85, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Charles River Laboratories. Even better, the Professional Investors rank is 98, meaning that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 70, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 70% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), Charles River Laboratories has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Charles River Laboratories Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% compared with alternatives), Charles River Laboratories shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Charles River Laboratories. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value concerning Charles River Laboratories's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 68% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 1 (dividends are expected to be higher than for 1% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 59% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Charles River Laboratories to 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 50, is a buy recommendation based on Charles River Laboratories's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Charles River Laboratories Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Charles River Laboratories shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Charles River Laboratories. Capital Growth has a rank of 61, which means that currently professionals expect the company to grow its invested capital more than 40% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has only a rank of 42, which means that, currently, professionals expect the company to grow less than 58% of its competitors, and Profit Growth is also low at a rank of 40. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Charles River Laboratories, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Charles River Laboratories Debt Financing Safety risky
| SAFETY METRICS | March 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 25 |
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| REFINANCING | ||||||||
| REFINANCING | 14 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 67 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 18 |
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ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% compared with alternatives), the company Charles River Laboratories has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Charles River Laboratories is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Charles River Laboratories. Liquidity is at 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 14, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 86% of its competitors. Leverage is also high at a rank of 25, which means that the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), Charles River Laboratories has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Charles River Laboratories Below-Average Financial Performance
| COMBINED PERFORMANCE | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| COMBINED | ||||||||
| COMBINED | 39 |
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ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Charles River Laboratories (Life Sciences Tools & Services, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Charles River Laboratories are a good value (attractively priced) with a consolidated Value Rank of 50 (better than 50% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 18), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Charles River Laboratories's financial characteristics. As the company Charles River Laboratories's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 50) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 18) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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