Jim Slater's Zulu stocks soar but they're getting harder to find

Tuesday, Oct 08 2013 by
7
Jim Slaters Zulu stocks soar but theyre getting harder to find

When Jim Slater wrote The Zulu Principle back in 1992, it quickly caught on as an investing bible for anyone that wanted to find great growth shares at reasonable prices. It also cemented a remarkable return for a man who made and lost a fortune during his days as a swashbuckling City dealmaker two decades earlier. Since then, the strategy has proved to be highly effective at picking out growth stars and this year has managed to find some of the best performing stocks in the market. The bad news is that these Zulu shares are getting harder to find.

Slater devised his investing process while penning a regular Sunday Telegraph column under the nom de plume ‘the Capitalist’. The appeal of the book that followed owes as much to his enthusiasm and solidarity with regular investors as it does to the investing thesis that underpins it. Slater wrote The Zulu Principle with assistance from his son Mark who has used the the strategy at his MFM Slater Growth fund with notable success over the past three years, earning it top performing fund in 2010 by industry researcher, Trustnet.

In search of growth

Slater’s rules for buying and selling growth shares at the right moment and the right price focus on earnings growth in generally small, profitable companies with strong cashflow, low debt and signs of strength in their shares. Among the most important features is what’s known as the the PEG, or the ‘price-earnings growth’ factor. This handy value metric measures whether the promise of growth comes at a reasonable price and does it by studying the relationship between the forecast price-to-earnings ratio and the expected rate of earnings-per-share growth. You can read much more about Zulu Principle investing here.

At Stockopedia, our interpretation of the Zulu Principle Rules has outperformed the FTSE 100 for the last two years - with a 43.9% return in the last 12 months versus a measly 10.8% for the FTSE 100. That performance also measures up well against the MFM Slater Growth fund which returned 19.5% over the same period, perhaps going to show how running large amounts of money can reduce the opportunity set available. The screen performance has been driven by some spectacular individual gains including shares in industrial printhead supplier Xaar (LON:XAR), which were picked up last December at 292p and have…

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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Xaar plc is engaged in the development of digital inkjet technology and manufacture of piezoelectric drop-on-demand industrial inkjet printheads. The Company's segments are product sales, commissions and fees, and royalties. It offers a range of industrial inkjet printheads and printhead systems, which are designed and produced to meet the customer-driven requirements of a range of manufacturing applications. Its primary markets include wide-format graphics, ceramic tiles, labels, packaging, coding and marking, three-dimensional (3D) printing, advanced manufacturing and decorative laminates. The Company sells its technology in component form (the printhead) to original equipment manufacturers (OEMs) producing and selling the complete digital printing solution to the end market. It partners and co-develops with fluid suppliers, hardware and software integrators, and substrate suppliers to deliver a total solution to the end user. more »

LSE Price
86.8p
Change
1.6%
Mkt Cap (£m)
66.8
P/E (fwd)
n/a
Yield (fwd)
n/a

Staffline Group plc is a holding company, which is engaged in the provision of recruitment and outsourced human resource services to industry and services in the welfare to work arena and skills training. The Company has two segments: Staffing Services, which includes the provision of temporary staff to customers, and PeoplePlus, which includes the provision of welfare to work and other training services. Its Staffing Services focuses on providing complete labor solutions in agriculture, food processing, manufacturing, e-retail, driving and the logistics sectors. Its recruitment business operates from well over 300 locations in the United Kingdom, Eire and Poland. The Staffing brands include Staffline OnSite, based on clients' premises providing both blue and white collar, out-sourced, temporary workforces. Its Employability includes work program, prime contractor in over nine regions and sub-contracts in approximately five regions in England. more »

LSE Price
150.4p
Change
0.3%
Mkt Cap (£m)
103.4
P/E (fwd)
2.8
Yield (fwd)
9.3




  Is LON:XAR fundamentally strong or weak? Find out More »


4 Comments on this Article show/hide all

johnrosier 8th Oct '13 1 of 4
1

My favorite screen! Blending growth with reasonable valuation. I hold Globo (LON:GBO), Regenersis (LON:RGS) and recently bought into Adept Telecom (LON:ADT) which looks attractive to me. Like the look of Thalassa but haven't pulled the trigger yet!

Website: JohnsInvestmentChronicle
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Brokertobroker 8th Oct '13 2 of 4

Agree!
Very recently bought some Thalassa. Expecting an exceptional 2014.
Feel like I'm a little late to the party - time will tell......

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lightningtiger 24th Oct '13 3 of 4

I am holding Thalassa & a happy bunny thanks I also bought ADT & have held TEP for a long time too. Dart I have sold, I have to be ruthless on a stop loss. Gathering a few hit list screens & don't remember RGS . I will check it out................Yes on my hit list, this looks really good to me.

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rish57 8th Oct '14 4 of 4

I'm now using Company Refs in addition to my normal research -it's based and devised by Jim Slater - this allows me to look at all the fundamental data on a single page. finding it really useful -

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About Ben Hobson

Ben Hobson

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