Slater Growth P

Investment Process

The primary valuation tool utilised in stock selection is the price earnings to growth ratio (PEG) - the manager looks for companies whose value (based on PE) is cheap compared to their growth rate. He screens the entire UK market for low PEG ratios, then applies a secondary cashflow-based screen to verify the earnings figure. Around 85% of portfolio companies come from this screening process, though other sources are also used. The resulting companies are then analysed with a focus on: - Sustainable and above-average earnings growth prospects; - Robust balance sheet/low debt; - A competitive advantage such as a high market share or brand name; - A positive recent trading statement; - An absence of heavy directors’ selling and ideally some recent directors’ buying. Only once this analysis has taken place does Slater meet company management. He is supported by a co-manager and two highly experienced analysts.