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Technology Stocks : Simulation Sciences (SMCI)

SMCI 50.73

-2.4%

Nov 3 3:59 PM EST

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To: Gangyi Feng who wrote (101)	2/12/1998 9:58:00 PM
From: Rational	Read Replies (1) of 183

I have a friend at a pretty high level working in SMCI and is responsible for developing dynamic optimization models for petrochemical process industry. From him I have a decent idea for AZPN and SMCI. AZPN is more of a consulting firm, whereas SMCI is strong in developing standardized GUI software for achieving the same goal. One of the key ingredients for AZPN and SMCI is the technology developed at Shell. AZPN acquired a firm that was formed by an ex-Shell employee who left Shell with the know-how. But, the Shell division that perfected the technology subsequently was bought by SMCI to build the technology into its strong GUI PRO II/V. SMCI is way advanced; just that due to a consulting focus, AZPN is able to bill more billable hours and a couple of millions of dollars extra revenue simply pushes the earnings, making the Wall Street to react positively. SMCI, on the other hand, is developing the software and with less billable hours is targeting to generate a very high margin software. SMCI does and will continue to consult, but with a standardized software, they will focus more on selling a product than selling just skilled labor. My friend (formerly from Shell) tells me that the guy who is working at AZPN is also very smart, but did not have all the developments that Shell lately came up with and AZPN is far behind in GUI. Given the price, SMCI looks like a solid bet. A couple of contract announcements will make the price move fast to $12, IMO. Sankar

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