Cramer's Outsourcing R&D Stock Plays Portfolio - Stockpickr! Your Source for Stock Ideas

Cramer's Outsourcing R&D Stock Plays

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Date updated:01-17-2008

Cramer recently focused on contract research organizations, or CROs. These companies allow big pharmaceuticals to outsource their clinical trial work to cut costs.

CVD
Covance Inc
$53.87
+0.52%
$53.75

Cramer's favorite in this space is Covance (CVD). Covance, Cramer said, handles early and late stage testing and has a solid customer base. The company also has an immaculate balance sheet, according to Cramer. Covance has $250 million in cash, no debt and $300 million in expected free cash flow over the next two years. Cramer sees the potential for Covance to trade at 37 times this year's earnings, which translates to a target price of $115, or a 33% upside. Despite being just $1 off its 52-week high, Cramer said Covance "must be bought on any weakness."

People owning CVD also tend to own: BDX BGC AAPL COH CROX CSCO CTSH

TheStreet.com Rating: C+ What is this?

CRL
Charles River Lab
$32.40
-0.58%
$32.57

Cramer also recommended Charles River Labs (CRL) as an early stage CRO play and Parexel (PRXL) as a pure-play late stage CRO.

People owning CRL also tend to own: ADM AEE AMGN BLUD BW CAT COP

TheStreet.com Rating: C- What is this?

PRXL
Parexel Internati
$12.87
-0.08%
$12.77

Cramer also recommended Charles River Labs (CRL) as an early stage CRO play and Parexel (PRXL) as a pure-play late stage CRO.

People owning PRXL also tend to own: PPDI VZ AAPL ADS BIDU EP FAN

TheStreet.com Rating: C+ What is this?

NVS
Novartis Ag Ads
$55.30
+1.00%
$55.23

He also still likes drugmaker Novartis (NVS) and retailer CVS Caremark (CVS). CVS is a stock that he also owns for his Action Alerts PLUS portfolio.

People owning NVS also tend to own: ANN AUY BAC BHI ERIC F GE

TheStreet.com Rating: B What is this?

CVS
Cvs Caremark Cp
$31.60
-0.91%
$31.76

He also still likes drugmaker Novartis (NVS) and retailer CVS Caremark (CVS). CVS is a stock that he also owns for his Action Alerts PLUS portfolio.

People owning CVS also tend to own: ADM AVP BF-B BTI CL DEO K

TheStreet.com Rating: B What is this?

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