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.

symbol name last price % change open
  • +
  • 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: BDXBGCAAPLCOHCROXCSCOCTSH

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: ADMAEEAMGNBLUDBWCATCOP

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: PPDIVZAAPLADSBIDUEPFAN

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: ANNAUYBACBHIERICFGE

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: ADMAVPBF-BBTICLDEOK

TheStreet.com Rating: B What is this?

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