Simulations Plus (SLP)

[dickmilde]

SLP made a huge move today… Up 17.6% on almost 3 X average volume. Many people continue to say that SLP is priced too high with a PE over 30. It just got more expensive today. I have waaaaayyyy too much of this in my portfolio but as a result I had a record gain in my account today SLP stock is up 42 X since the lows of the dot com bust in the early 2000’s. Almost unheard of. And the total market cap is still under $200 million.

SLP seems to be an exceptionally conservative company managed by an aerospace engineer that got his start with computer modeling in rocket engines at Auburn University. They continue to be a leader in their field of providing software for the drug discovery industry. It looks like the old brute force way of trial and error to find new drugs is slowly giving way to discovery by computer. SLP seems to be at the ground floor in an industry that has a very long way to go. There is new interest in their modeling expertise in other industries…. Food, chemicals and aerospace applications. Almost half of the employees have a Phd degree. 16 of the 63 employees have one or more master degrees.

The investment attraction is not in looking for a PE expansion but rather the continued growth in sales and earnings.