What Makes Charles River Laboratories (CRL) an Investment Bet?

Core Insights - The Madison Small Cap Fund experienced a challenging third quarter in 2025, with a decline of 1.3%, underperforming its benchmarks due to stock selection and a speculative market environment [1] Company Analysis: Charles River Laboratories International, Inc. (NYSE:CRL) - Charles River Laboratories operates in the drug discovery and development outsourcing sector, providing a range of services including drug discovery, non-clinical development, and safety testing [2] - The stock of Charles River Laboratories saw a one-month return of -14.15% and a 52-week decline of 16.72%, closing at $167.64 with a market capitalization of $8.25 billion on November 21, 2025 [2] - The Madison Small Cap Fund initiated a position in Charles River Laboratories in Q3 2025, highlighting its high-quality service offerings and strong operating margins of 20% or more [3] - Despite recent challenges in the drug development space, Charles River Laboratories has shown a 12% compound annual growth rate over the past decade, indicating resilience [3] - The management team is experienced, and the company is expected to achieve earnings power of approximately $15 by 2028, with a conservative intrinsic value estimate of $228 based on a sum of the parts analysis at ~12x EBITDA [3] - Revenue growth is anticipated at 4% from 2024 to 2028, supported by restructuring and cost management efforts [3]