Cisco Systems, Inc. (CSCO) December 20 and January 20 calls were active with total call option volume of 497K contracts compared to 143K puts. December and January call option implied volatility is at 22, February is at 26, compared to its 26-week average of 30 according to Track Data. Large volume suggests traders positioning for movement.

Charles River Laboratories (CRL) closed up 3%, on Relational Investors LLC and the California State Teachers' Retirement System having a combined 6.1% stake in the company, and wanting the company to put itself up for sale, reports the Wall Street Journal. January option implied volatility of 29 is below its 26-week average of 34 according to Track Data, suggesting decreasing price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Today started out strong and ended up even stronger with triple-digit DJIA gains. The reports from ISM showed no manufacturing recession and actually showed more employment improvements. This was on the heels of a strong Chinese auto figure and on all major indexes outside of the US trading higher. The S&P 500 even got back above its 200-day moving average.

Here were today's unofficial closing bell readings:

Dow Jones 10,674.38 +208.44 (1.99%)
S&P 500 1,125.86 +24.26 (2.20%)
Nasdaq 2,295.36 +40.66 (1.80%)

Outsourcing helps biomedical firms initiate more drug candidates and move them through the pipeline faster, while controling development costs. A recognized source of the assistance needed to smooth the process is headquartered Wilmington, Massachusetts.

Charles River Laboratories International (NYSE: CRL) offers products and services required by pharmaceutical and biotechnical research organizations. Its Research Models and Services unit provides the purpose-bred rodents used in the development of new drugs, devices and therapies. The unit also offers vaccine support and in vitro technology products for testing of medical devices and injectable drugs. The Preclinical Services segment conducts a variety of research programs, including Phase I trials. The company operates from facilities in the United States, France, Germany, Italy, Japan and the United Kingdom.

Outsourcing helps biomedical firms initiate more drug candidates and move them through the pipeline faster, while controlling development costs. A recognized source of the assistance needed to smooth the process is headquartered in Wilmington, Massachusetts.

Charles River Laboratories International (NYSE: CRL) offers products and services required by pharmaceutical and biotechnical research organizations. Its Research Models and Services unit provides the purpose-bred rodents used in the development of new drugs, devices and therapies. The unit also offers vaccine support and in vitro technology products for testing of medical devices and injectable drugs. The Preclinical Services segment conducts a variety of research programs, including Phase I trials. The company operates from facilities in the United States, France, Germany, Italy, Japan and the United Kingdom. It is in the final stages of establishing a preclinical services joint venture in China.

The firm surprised the Street earlier in the month, when it reported Q1 EPS of $0.64 and revenues of $291.2 million. Analysts had been expecting $0.61 and $279.8 million. Management also guided FY07 EPS to $2.43-$2.53 ($2.49 consensus) and FY07 revenues to $1.16-$1.19 billion ($1.17B consensus). CRL shares popped on the news and have since been defining a bullish "pennant" consolidation pattern. Equities frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys," two "buys" and seven "holds." Analysts see a 14% average annual growth rate through the next five years. The CRL Price to Book ratio (2.10), Price to Cash Flow ratio (16.06), EPS Growth rate (38.03%), Operating Margin (18.18%) and Net Profit Margin (12.36%) compare favorably with industry, sector and S&P 500 averages.

The stock is one of those used to calculate the S&P 400 MidCap Index. Institutional investors hold about 95% of the outstanding shares. Over the past 52 weeks, CRL has traded between $33.73 and $52.30. A stop-loss of $45.50 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

Charles River Laboratories International (NYSE:CRL) offers animal research models, principally purpose-bred rats, mice and other rodents required in research and development for new drugs, devices and therapies. It also manages drug trials.

The firm surprised the Street last month when it guided 2006 non-GAAP earnings per share to $2.15-$2.21 from a previous guidance of $2.12-$2.18. Analysts had been looking for $2.19. Management also guided 2007 non-GAAP EPS to $2.43-$2.53, versus consensus of $2.48. The stock's shares popped on the news and have since been defining a bullish "flag" consolidation pattern. Equities frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with two "strong buys", one "buy" and eight "holds". Analysts see a fourteen percent growth rate, through the next year. The CRL P/E ratio (21.57), PEG ratio (1.54), Price to Sales ratio (2.68), Price to Book ratio (1.86), Price to Cash Flow ratio (11.86) and Net Profit Margin (13.52%) compare favorably with industry, sector and S&P 500 averages.

The stock is one of those used to calculate the S&P 400 MidCap Index. Institutional investors hold about 95 percent of the outstanding shares. Over the past twelve months, CRL has traded between $33.73 and $51.50. A stop-loss of $38.00 could look good here. Note that the firm is next expected to report quarterly results in early February.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.