Is CRL Stock A Buy or Sell?

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Charles River Laboratories International Inc. (NYSE:CRL).

Is CRL stock a buy or sell? Charles River Laboratories International Inc. (NYSE:CRL) was in 43 hedge funds’ portfolios at the end of December. The all time high for this statistic is 41. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CRL investors should be aware of an increase in enthusiasm from smart money in recent months. There were 36 hedge funds in our database with CRL positions at the end of the third quarter. Our calculations also showed that CRL isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Do Hedge Funds Think CRL Is A Good Stock To Buy Now?

At the end of December, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from the third quarter of 2020. On the other hand, there were a total of 32 hedge funds with a bullish position in CRL a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Is CRL A Good Stock To Buy?

More specifically, Marshall Wace LLP was the largest shareholder of Charles River Laboratories International Inc. (NYSE:CRL), with a stake worth $213.1 million reported as of the end of December. Trailing Marshall Wace LLP was Renaissance Technologies, which amassed a stake valued at $108.6 million. Ariel Investments, Millennium Management, and Iridian Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Precept Capital Management allocated the biggest weight to Charles River Laboratories International Inc. (NYSE:CRL), around 9.11% of its 13F portfolio. Sandler Capital Management is also relatively very bullish on the stock, setting aside 5.49 percent of its 13F equity portfolio to CRL.

As industrywide interest jumped, key money managers have been driving this bullishness. Eminence Capital, managed by Ricky Sandler, assembled the largest position in Charles River Laboratories International Inc. (NYSE:CRL). Eminence Capital had $17 million invested in the company at the end of the quarter. Michael Rockefeller and Karl Kroeker’s Woodline Partners also made a $6.5 million investment in the stock during the quarter. The following funds were also among the new CRL investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Paul Tudor Jones’s Tudor Investment Corp, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks similar to Charles River Laboratories International Inc. (NYSE:CRL). These stocks are ContextLogic Inc. (NASDAQ:WISH), Open Text Corporation (NASDAQ:OTEX), W.P. Carey Inc. (NYSE:WPC), Howmet Aerospace Inc. (NYSE:HWM), Loews Corporation (NYSE:L), Opendoor Technologies Inc. (NASDAQ:OPEN), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). This group of stocks’ market caps are closest to CRL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WISH 24 348110 23
OTEX 18 234136 -1
WPC 18 197829 -5
HWM 49 4092342 14
L 19 174655 1
OPEN 28 1024602 28
JKHY 28 411775 -2
Average 26.3 926207 8.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $926 million. That figure was $1187 million in CRL’s case. Howmet Aerospace Inc. (NYSE:HWM) is the most popular stock in this table. On the other hand Open Text Corporation (NASDAQ:OTEX) is the least popular one with only 18 bullish hedge fund positions. Charles River Laboratories International Inc. (NYSE:CRL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CRL is 80.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on CRL as the stock returned 14.7% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.