The Slater investing playbook: screening for growth

Our Jim Slater ZULU Principle Screen has been the best-performing Guru screen by a large margin since its inception in 2011. This approach is based on the principles outlined by the famous UK investor in his 1992 book, The Zulu Principle – essential reading for all stockpicking investors.

Here's a snapshot of the rules we use in the ZULU screen:

Based on quarterly rebalancing, this screen has generated a 1,350% return (excluding dividends) over the last 14 years. That’s equivalent to 21% annualised:

I know that a number of subscribers have followed this approach with some success. I am also happy to admit that Slater’s ideas also influenced the rules-based strategy I use to run the Stock in Focus (SIF) Portfolio.

However, investing purely by following the ZULU screen results isn’t without its challenges. Very few stocks typically qualify for this screen at any one time. There are just two at the time of writing, for example:

Building a balanced, diversified portfolio with a sensible number of positions thus requires some discipline and planning, with gradual execution over time and a systematic approach to buying and selling.

These constraints should help to reduce the risk of unsustainable losses. They are also likely to restrict overall returns.

One person who has risen to the challenge of executing this strategy in a sustainable and professional way is Jim Slater’s son Mark Slater. He’s chairman and chief investment officer of UK asset manager Slater Investments.

A professional result

Slater Investments runs three main funds, but its largest and probably most successful is the Growth Fund.

Between its inception in March 2005 and December 2025, the Slater Growth Fund grew to £445m of assets under management and delivered a 607% total return (9.8% annualised). This is nearly double the average return from UK equity funds over the same period:

Slater’s Growth Fund has also comfortably outperformed the market. Over the same 2005-2025 period, the FTSE 100 Total Return index delivered a gain of 338%, or 7.3% annualised.

In a graphic example of the power of compounding, it’s worth noting how a modest-sounding 2.5% per year outperformance versus the FTSE has compounded into a 269% outperformance over 20 years. This highlights the value of small gains (or small reductions in costs) over long periods.

Slater Growth: systematic approach

The Growth Fund’s stock selection strategy is based on an initial screening approach, followed by an overlay of active research and due diligence. It’s very similar in principle to many of the ideas we regularly discuss here at Stockopedia:

We run an initial computer screen of our universe that uses a number of relevant criteria including: – Price to Earnings Growth Ratio (PEG) – ESG screening – Sustainable earnings growth – Strong cash flow – Competitive advantage – Pricing power – Positive recent trading statement – Director buying.

I’m not able to get full holding details for the Slater Growth Fund from the company’s website – like many active managers, the fund only discloses its larger positions.

However, Alex kindly extracted a list of Slater Investments’ reported holdings from our databases for me to use as a base for further research. I then refined this further to try and deduce which of these companies is held in the Growth Fund (as opposed to Recovery or Income) – this information is not always included in the regulatory disclosure statements.

My list has 27 stocks, whereas the Slater Growth Fund had 40 holdings at the end of December 2025. This means I know my list is incomplete. I also recognise there’s a risk that some of the companies I’ve included may not be current Growth Fund holdings.

For these reasons I’m not going to publish the full list of companies I’ve produced. Instead, I’m going to:

• Look at some key financial metrics for the portfolio as a whole – I’m more confident in these;

• Highlight some individual stocks from among the Slater Growth Fund’s major holdings.

Portfolio metrics

I often find it useful to consider the average characteristics of a portfolio to see if they reflect my chosen strategy.

In this case I can see that the key element of the Slater growth approach are directly reflected in the median values of the portfolio shares I’ve identified:

	Market Cap	StockRank	TTM P/E	Rolling 1y P/E	Rolling 1y PEG	Rolling 1y div yield
Median*	£189m	60	16	12	0.8	3.0%

*Estimated

For example, the rolling one-year forward P/E is lower than the trailing 12-month P/E ratio. This indicates earnings growth is expected during the current trading period.

The PEG ratio is a measure strongly associated with the Slater growth style. This ratio effectively normalises the P/E ratio to reflect the expected earnings growth rate. The logic behind this is that a stock with a higher earnings growth rate is likely to deserve a higher valuation.

A PEG ratio of less than 1.0x is often used as a benchmark for an attractive combination of growth and value – growth at a reasonable price.

In this case, the median figure of 0.8x in my selection suggests the shares I’ve identified are still valued quite affordably relative to their expected near-term earnings growth.

Slater Growth: 5 top-ranked stocks

I’m going to finish this piece by looking at the five highest-ranked stocks I’ve been able to identify from the Slater Growth Fund’s current holdings.

Trifast (LON:TRI)

The Growth Fund owns more than 9% of this precision industrial engineering business, according to regulatory filings from July 2025.

I reviewed Trifast in a Stock Pitch last week so I won’t repeat myself too much here, except to note that on paper at least, this stock scores well on a number of valuation and earnings growth metrics:

I can see that Trifast could be a good fit for a Slater growth approach, if the fund’s managers believe the company can continue to execute successfully on its turnaround plans.

Serco (LON:SRP)

According to our data, Slater Investments’ last-reported update on its holding of this outsourcing group was in December 2024.

At the time, Serco was trading on a P/E of 9.5 and was styled as a Contrarian pick by our algorithms.

Over the past year, the share price has doubled…

… but FY26 earnings estimates have only risen by 6%:

As a result, Serco has gone from being a Contrarian to a High Flyer.

The stock now looks significantly more expensive than it did in December 2024 and has a rather high PEG ratio:

That’s not to say that Serco can’t continue to outperform. But this low-margin business doesn’t look such a tempting buy to me as it did at the start of 2025.

Serco accounted for 4.7% of the Slater Growth Fund at the end of last year. It will be interesting to see if there are any changes to the holding over the coming year, given the change in its valuation.

Elixirr International (LON:ELIX)

This acquisitive management consultancy business has been something of a success story since its 2020 IPO:

Profit growth has been strong:

…and quality metrics are good:

According to the original AIM admission document, Slater Investments acquired an 8.8% stake in Elixirr at the time of the IPO.

Subsequently this stake was reported at 6.8% in last year’s Main Market admission document and is currently shown at 6.5% in the StockReport. So perhaps we can conclude that Slater has trimmed its holding at some point(s) following the IPO:

However, the valuation remains reasonable with strong EPS growth forecast and a low PEG ratio:

On brief inspection, Elixirr International continues to look like a reasonable fit for the Slater growth strategy.

Foresight group (LON:FSG)

This infrastructure and private equity-focused asset manager was the Growth Fund’s second-largest holding at the end of 2025. Slater is Foresight’s second-largest shareholder after founder and executive chairman Bernard Fairman, with a c.£25m stake:

Owner management is an attraction here for Slater, I suspect, as is Foresight’s exposure to unlisted investments and super profitability:

Valuation is also tempting – earnings growth is expected to be c.20% in FY26 and FY27. I would argue that the valuation doesn’t really reflect this strong momentum:

I recently added Foresight Group to the SIF portfolio and to my personal holdings, after the stock appeared in my SIF buying screen. I can see why this business could be a good fit for a Slater strategy.

Supreme (LON:SUP)

This consumer goods group is best known for its core vaping business, but is expanding into branded drinks and wellness-related products.

Last year saw the company acquire the Typhoo tea and Slimfast brands, following the £15m acquisition of soft drinks group Clearly Drinks in 2024.

Supreme is family controlled and boasts attractive quality metrics, but it’s probably fair to say the heavy vaping exposure means it also carries some regulatory risk and is perhaps suffering from a ‘sin stock’ discount.

The growing success of the non-vaping parts of the business suggests to me that there is potential for this business to earn a higher valuation over time.

Certainly the current valuation looks quite modest, in my view, given the expectation of double-digit earnings growth over the year ahead:

While this business might not be without risk, I can see that Supreme could be a good fit for a Slater Growth strategy. For a broader look at Supreme, Graham’s review in September could also be worth a look.

Disclosure: at the time of publication, Roland owned shares in Foresight Group.