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Technology Stocks : Simulation Sciences (SMCI)

SMCI 51.96

+3.2%

Oct 31 9:30 AM EST

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To: Gangyi Feng who wrote (121)	2/15/1998 2:20:00 PM
From: Rational	Read Replies (2) of 183

Gangyi: Thanks for your perspective. About insiders' holdings, it is difficult to predict how it should be viewed. For example, CTYS insiders held most of their holdings and sold very little since the company's IPO. The stock price climbed to $36 in 1997 and thereafter it has dropped to 5/8. Insiders have not sold yet. On the other hand, SUNW's CEO holds very little of his company's stock. MSFT's Bill Gates sells a lot of his stock every now and then; and the more he sells, the higher MSFT's stock price becomes. One of the reasons for SMCI insiders selling some of the stocks could be that they might not be getting enough in salaries, as compared to AZPN. Thus, unless the entire compensation scheme in a company is know to me, it is difficult for me to say how the insider sales should affect the stock price. Clearly, the SMCI 401(k) Plan must have bought SMCI stock at about $12 per share and this works out to about $20K per SMCI employee; which is a big mark of confidence that the Plan has on the company. On competition between SMCI and AZPN: sure they have competition; but they have their strongholds that cannot be easily shaken. AZPN is way behind SMCI in GUI software development and SMCI has the same know-how that AZPN has, but is focusing on developing software rather than consultancy. In consultancy, the billable hours can result in a lot of revenue, but to sustain it may prove elusive. While license fees based on software adoption can generate a sustainable level of revenue and earnings. These are just my opinion and should not be construed as advice for investment or disinvestment in SMCI or AZPN. Sankar

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