Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drug research contractor Charles River Laboratories International (NYSE: CRL) spiked 19% on Tuesday on reports that management is considering a sale of the company.

So what: Citing an article published by dealReporter last night, Wall Street analyst R.W. Baird said that a deal is imminent and that the company could fetch as much as $40 per share -- a whopping 45% premium to yesterday's close. Of course, even if the rumors are unfounded, the buzz alone should draw a ton of attention to Charles River's seemingly undervalued business units.

Now what: Charles River may be one takeover target worth looking into. Even with today's big pop, the stock is still off more than 20% from its 52-week highs and currently trades at a forward P/E of 12. Fools know never to buy a stock based on buyout buzz alone, but Charles River's solid reputation in the lab testing space, big cash flow generation, and -- most importantly -- reasonable valuation might provide enough downside protection to make the bet a safe one.

Interested in more info on Charles River? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Charles River. Try any of our Foolish newsletter services free for 30 days.

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