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Simulations Plus, Inc. Message Board

  • alray31 alray31 Jan 11, 2013 7:07 PM Flag

    Price Drop

    When do you think the stock price might start going in a positive direction again. Seems in a downward trend since the dividend payout at the end of last year.

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    • Nobody knows the answer to that. In all honesty I would expect some price weakness because anybody that buys now will not see the full dividend since it was pulled forward. In other words the effective yield will be less during 2013 for new investors. Those that were invested prior to the payout have already received more than the normal yield on their money. But, looking at the larger picture the dividend is not what's important here. The business model that provides the drug discovery industry with very sophisticated software tools to avoid costly trial and error and time consuming tests is what's important. The dividend only represents about 5% of an investors expectation. My expectation as it relates to the underlying business far exceeds a 5% I try to keep my eye on how well the business is managed and the new developments that will provide future growth. All other things being equal we should expect a price weakness equal to the dividend or about .14. Clearly we have already seen that so there is probably some skepticism in the market re the ability for SLP to grow. We won't know the answer to that until we see the Q reports and then It's usually too late to protect your position. The best thing we have going for us is the fact that the CEO is second to none... SLP is a good example of how a business should be managed.... Very conservative with lots of attention to detail. Walt will continue to make the right decisions for the stock holders... After all he has his entire life invested in SLP... He isn't going to screw this up... At least not intentionally.

      So... I can't foresee the future stock price any better than you can but I am betting that SLP will continue to grow and be a larger company next year. We should be getting another reference point with the upcoming Q release, probably next week. Tune in to the conference call and later study the presentation material that Walt always posts at the web site and look for clues that provide reasons for future growth. You can find all the SEC filings for SLP here:
      sec #*#gov/cgi-bin/browse-edgar?company=&match=&CIK=slp&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany
      Change the #*# to a dot
      With that information you should form an opinion whether or not investors will continue to hold their SLP stock.

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