Wasatch Global Investors, an asset management company, released its “Wasatch Micro-Cap Growth-U.S. Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter, U.S.-based micro-cap companies benefited from optimism surrounding decreasing interest rates and a smooth economic transition, which led to greater investor appetite for risk. The strategy appreciated and outperformed the benchmark Russell Microcap® Growth Index in the quarter, which returned 8.57%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Wasatch Micro-Cap Growth-U.S. Strategy highlighted stocks like Simulations Plus, Inc. (NASDAQ:SLP) in the third quarter 2024 investor letter. Simulations Plus, Inc. (NASDAQ:SLP) focuses on the development of drug discovery and development software that utilizes artificial intelligence and machine learning based technology for modeling and simulation, and prediction of molecular properties. The one-month return of Simulations Plus, Inc. (NASDAQ:SLP) was -7.37%, and its shares lost 30.23% of their value over the last 52 weeks. On January 2, 2024, Simulations Plus, Inc. (NASDAQ:SLP) stock closed at $27.91 per share with a market capitalization of $560.586 million.
Wasatch Micro-Cap Growth-U.S. Strategy stated the following regarding Simulations Plus, Inc. (NASDAQ:SLP) in its Q3 2024 investor letter:
“Simulations Plus, Inc. (NASDAQ:SLP) was the strategy’s largest detractor from performance during the quarter. The company develops and produces software that helps pharmaceutical companies achieve efficiencies in the drug discovery process by enabling them, through simulations, to either fine-tune or avoid clinical trials, which are expensive and have a high failure rate. Simulations Plus has a long track record of delivering consistent growth and margin expansion. However, the stock has been down due to concerns about the funding environment for biotechnology and pharmaceutical companies. We reduced our position in Simulations Plus over concerns linked to the company’s recent acquisition strategy, which we will continue to monitor. However, we remain confident in the growth potential of the company’s core business.”
A close-up view of a scientist’s hand pressing keys on a laptop as another looks closely at a 3-D model on a large monitor.
Simulations Plus, Inc. (NASDAQ:SLP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Simulations Plus, Inc. (NASDAQ:SLP) at the end of the third quarter which was 8 in the previous quarter. Simulations Plus, Inc.’s (NASDAQ:SLP) fiscal year total revenue increased 18% to $70 million. While we acknowledge the potential of Simulations Plus, Inc. (NASDAQ:SLP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Simulations Plus, Inc. (NASDAQ:SLP) and shared Conestoga Capital Advisors’ views on the company. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.