I would like to add a few details from memory to this informative backstory on SLP. Walt and his wife own approximately 40% of the shares. To provide himself with some cash, without selling his stake, he created a dividend to reward himself and us shareholders. A one time dividend, in my opinion, would have been bad for the company. An ongoing dividend has been very beneficial to the share price. I would be hard pressed to name another company that split their shares 2 for 1 in the $10-$12 range. Oh, and about two years later, SLP did it again. My understanding is that was done to improve the float of shares on the market (increase the share count). Set a price you are willing to pay and buy this stock when it meets your target.
There was a lot of discussion at the time that the dividend was being considered. If I remember correctly the general consensus was that investors wanted Walt, the CEO, to use the money and his management skills to grow the company faster instead. I believe that Walt gave that route serious consideration given the fact that he has constantly been in discussions with potential acquisition candidates. The reason that there have not been more business acquisitions is because the criteria that has been set for a good fit makes them very difficult to find. Not only does the business need to " fit " the SLP model but it must also be available at a reasonable price and have promise to add to sales and earnings of the core SLP business. Walt is very conservative, which is evident by looking at the financial results. Prior to the Cognigen acquisition there were only about 23,000 shares issued for growing the business. Still today there is zero debt.
OK... So why not just hire a bunch of PhDs and tell them to go to work on growing the business. I'm certain that if it were that simple Walt would jump at the chance. The problem is the required set of skills necessary to produce the SLP offerings... A basic requirement is a person with a detailed understanding of chemistry, a serious dose of biology along with the math and analytical skills AND the ability/desire to create software models that produce meaningful results. SLP almost always has employment openings available for engineers and chemists that have the required skills... they are far and few between. And suppose that they could actually come up with a significant number of chemists that posses the required skills... As the saying goes... You can't put 9 women to task to create a baby in one month.
So... The way to return some of the good results to the share holders is via a dividend. I am confident that even with the dividend payment that SLP will continue to grow as it has in the past.
Go to the SLP web site, click on the investors tab and select "Conference Calls".
Ted Grasela. the president of acquired company Cognigen, provides an excellent presentation. It's good to see that he has come up to speed in such a short time. He seems to understand the nuts and bolts of the SLP business very well and will certainly make a positive contribution to the continued growth of the combined business. This business combination looks like a good move for SLP and provides an excellent opportunity for continued growth. SLP will be a larger company next year and patient investors should be well rewarded.
There is a PowerPoint presentation filed at the SEC web site that lists some of the new products they are working on. sec.gov/Archives/edgar/data/1023459/000101968715000133/0001019687-15-000133-index.htm
This is an excerpt from the Qtly report citing Walt's comment: "...enabling me to increase my focus on products, services, and business development. I am particularly excited about two new products under development for use in the aerospace and healthcare industries. These products use our artificial neural network ensemble modeling engine and we intend to pursue customers and funding to develop customized tools and applications.”
I've been invested in SLP since the early 2000's. Split adjusted the shares were around 25 cents. SLP is very consistent in growing sales and earnings, so as long as that continues there shouldn't be a "leveling off" Yes, there will be ups and downs but keep your eye on the big picture.
Up 4% today on a good volume increase. That's a good way to get ready for another year of positive results. SLP continues to all the right stuff...The team at Simulations-Plus continues to find ways to make the company more valuable. I expect we will see a larger company next year which should result in a higher valuation.
Ave daily # shrs traded in last few yrs is about 20,000. It has relatively low float and followed by 1 investor co. With recent acquisition of Congnigen, increased revenues might become attractive. Great company with excellent mgt.
Is SLP not well known by investors? The number of shares trading everyday is
pitiful like today. I guess weak hands sell who need the money now versus
waiting for a great future.
good point. would personally prefer it below 4, but if they keep growing at same rate, will get there soon enough ...
You're looking in the rear view mirror. At a current run rate basis it's only selling at 6.75 times sales.