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Is Simulations Plus (SLP) A Great Investment Pick?

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Harding Loevner, an investment management firm, published its “Global Small Companies Equity Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 2.86% was recorded by the fund for the fourth quarter of 2021, beating its Benchmark, the MSCI All Country World Small Cap Index, which returned 2.22% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Harding Loevner Global Small Companies Equity Fund, in its Q4 2021 investor letter, mentioned Simulations Plus, Inc. (NASDAQ: SLP) and discussed its stance on the firm. Simulations Plus, Inc. is a Lancaster, California-based software company with an $804.3 million market capitalization. SLP delivered a -15.71% return since the beginning of the year, while its 12-month returns are down by -39.72%. The stock closed at $39.87 per share on March 02, 2022.

Here is what Harding Loevner Global Small Companies Equity Fund has to say about Simulations Plus, Inc. in its Q4 2021 investor letter:

"Simulations Plus offers modeling and simulation software for pharmaceutical and biotech companies for use throughout the drug development cycle. Its flagship software, GastroPlus, was first introduced in 1998. It allows drug researchers to evaluate potential toxicity, a critical first step in drug development that is traditionally performed through animal testing. The earliest versions of GastroPlus simulated the ways in which a drug is metabolized in the liver (liver damage is the main reason drugs are pulled from the market), but Simulation Plus has been able to use enhanced computing power to help understand how compounds are also absorbed in other parts of the body, including the brain, heart, and lungs. In addition to absorption, the latest GastroPlus software can visualize a drug’s pharmacokinetics (how the drug moves into, through, and out of the body) and its pharmacodynamics (how or whether a drug binds to a receptor within a cell, what happens when it does, and how it interacts with other drugs or body chemistry). These new capabilities are used in a variety of simulations, such as for predicting the effect of a drug on a specific, hard-to-test population such as pregnant women or infants. GastroPlus has been used in all phases of drug development by major American and European companies, including Eli Lilly, Pfizer, and Roche."

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Our calculations show that Simulations Plus, Inc. (NASDAQ: SLP) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. SLP was in 10 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 12 funds in the previous quarter. Simulations Plus, Inc. (NASDAQ: SLP) delivered a -12.37% return in the past 3 months.

In November 2021, we also shared another hedge fund’s views on SLP in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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