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Should You Consider Simulations Plus (SLP) as Good Investment?

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Jose Karlo Mari Tottoc
·3 min read
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Polen Capital Management, a value-driven, concentrated, long-term investment management firm, published its ‘Polen U.S. Small Company Growth’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A gross return of 29.14% was recorded by the fund for the Q4 of 2020, slightly below its Russell 2000 Growth benchmark that delivered a 29.61% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

In their Q4 2020 investor letter, Polen Capital Management mentioned Simulations Plus, Inc. (NASDAQ: SLP) and shared their insights on the company. Simulations Plus, Inc. is a Lancaster, California-based software company that currently has a $1.3 billion market capitalization. Since the beginning of the year, SLP delivered a -12.36% return, extending its 12-month gains to 84.03%. As of April 01, 2021, the stock closed at $63.03 per share.

Here is what Polen Capital Management has to say about Simulations Plus, Inc. in their Q4 2020 investor letter:

"During the quarter, we initiated positions in Simulations Plus. Simulations Plus is a global leader in innovative modeling and simulation software and consulting services to the pharmaceutical and biotechnology industry. Its products are designed to improve the cost, speed, and success rate of drugs brought to market. The company licenses its software to major pharmaceutical and biotechnology companies and national regulatory agencies. It has highly repeatable sales, with software renewal rates in the mid-90s. Its consulting services allow it to work directly with customers to better understand them and their pain points, which we believe further boosts Simulation Plus’s value proposition. We believe the company’s solutions are still in the early stages of adoption and have the potential to grow organically for years to come."

Top 15 Serial Entrepreneurs in the World
Top 15 Serial Entrepreneurs in the World

Our calculations show that Simulations Plus, Inc. (NASDAQ: SLP) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Simulations Plus, Inc. was in 14 hedge fund portfolios, compared to 10 funds in the third quarter. SLP delivered a -12.36% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.