Upslope Capital Management, an investment management firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Q4 was the most challenging quarter for upslope. Longs underperformed and shorts dragged. Similarly, month to date performance was also challenging. The fund returned -7.3% (net) in Q4 compared to +0.4% and +0.3% for the S&P Midcap 400 ETF (MDY) and HFRX Equity Hedge Index, respectively. In 2024, the fund’s return was +9.4% (net) compared to +13.6% and +7.8% returns, respectively, for the indexes. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Upslope Capital Management highlighted stocks like Charles River Laboratories International, Inc. (NYSE:CRL) in the fourth quarter 2024 investor letter. Charles River Laboratories International, Inc. (NYSE:CRL) offers drug discovery, non-clinical development, and safety testing services that operate through Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing) segments. The one-month return of Charles River Laboratories International, Inc. (NYSE:CRL) was -11.81%, and its shares lost 24.24% of their value over the last 52 weeks. On January 17, 2025, Charles River Laboratories International, Inc. (NYSE:CRL) stock closed at $163.50 per share with a market capitalization of $8.361 billion.
Upslope Capital Management stated the following regarding Charles River Laboratories International, Inc. (NYSE:CRL) in its Q4 2024 investor letter:
“Charles River Laboratories International, Inc. (NYSE:CRL) is a pharmaceutical services business, whose key offerings include drug discovery support and safety testing, research models, and outsourced manufacturing. The company holds leading market share positions in several of its business lines and has worked on ~80% of all drugs approved over the last five years. Customers are mostly biotech (40% of revenue) and pharma (30%) businesses – largely located in North America (70%) and Europe (25%).
Like plenty of other healthcare businesses that boomed during the COVID era, Charles River has had a challenging few years. Just recently – yesterday to be exact – the Company disappointed the Street with soft guidance for 2025. In Upslope’s view, CRL is a cyclical compounder going through a…cyclical downturn. Today, shares trade in-line with where they did five years ago – despite revenue and FCF/share that are 50% and 30% higher (while being in the midst of a cyclical downturn – i.e. real earnings power should be materially higher). While the company relies on volatile end markets, over the long run its own free cash flow tends to march higher, driven by advances in and rising demand for drug development. Upslope’s key thesis points include:…” (Click here to read the full text)
A laboratory scientist surrounded by drug-discovery equipment and resources.
Charles River Laboratories International, Inc. (NYSE:CRL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Charles River Laboratories International, Inc. (NYSE:CRL) at the end of the third quarter which was 42 in the previous quarter. In the third quarter, Charles River Laboratories International, Inc. (NYSE:CRL) reported $1.01 billion in revenues, a 1.6% decline on a reported basis over last year. While we acknowledge the potential of Charles River Laboratories International, Inc. (NYSE:CRL) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Charles River Laboratories International, Inc. (NYSE:CRL) and shared Brown Capital Management Mid Company Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.