Simulations Plus (SLP)

[dickmilde]

I'm not sure that I can even find my trade confirmations. I was buying right after the market toped out in 2000-2001. SLP went public at $4 a share with only 4 million shares. The CEO wanted more liquidity so he split the shares 2:1 two times which basically made those $4 shares $1. With the dotcom bust SLP traded down just under $1 a share which after the 2 splits is actually under 25 cents. I bought my shares below $4 before the split at various prices so I got a huge part of the gain.

The reason I had so much faith in this is because Walt, the CEO, was posting on the Raging Bull message board and he never told investors anything that didn't actually prove to be the case at later dates. The most honest guy you ever met. He was/is so hell bent and determined to make his stock position worth more that at one time he used his own airplane for business transportation and did not ask for expense money to cover his cost. He also cancelled his bonus because the money in the company was the best place for him to invest.

With a 4 million share IPO and two 2:1 stock splits the number of original shares is 16 million. The share count today is 17.3 million. Part of the increase is for shares issued for acquisitions. He doesn't play the game of issuing shares and give them to the principals so that everybody is happy getting free shares. The result is that almost all of the growth is retained in stock holder equity. There is still almost zero debt... The amount of debt on the balance sheet is the balance owed to Dilisym for the most recent acquisition. Dilisym is already increasing sales and adding to SLP earnings.

On the business side SLP provides high quality software for drug discovery. They produce good stuff that actually helps the drug discovery companies save years of time during drug development. In the conference call yesterday Walt said a chemist working on a specific molecule did not know 15 years ago that it would not work... Today the chemist will know that in almost real time.

Everytime I look at this I can't find a better place to put my money

SLP has done so well for me that it has outperformed anything else I ever bought. The result is that every year SLP becomes a larger percent of my total stock portfolio. I may have to start selling some because people are telling me I'm crazy to have so much in one stock.