Price / Earnings to Growth ( Jim Slater Definition)

What is the definition of PEG Slater?

Jim Slater defined his own version of the Price Earnings Growth (PEG) ratio in the book 'The Zulu Principle. This version uses both forecast rolling PE ratio and forecast eps growth rates, and incorporates the additional restriction that a companies must have 4 consecutive growth periods, albeit potentially including two forecast periods.


Stockopedia explains PEG Slater...

The PEG gives a rule of thumb as to whether a company is good value for the level of earnings growth. A PEG ratio of 1 is supposed to indicate that the stock is fairly priced (earnings growth rate equivalent to PE Ratio). A ratio less than 0.5 is considered to be excellent.

Critics accuse Slater's PEG method of double counting the earnings growth of the company in question. Using a forward looking P/E in the numerator already takes into account the earnings growth rate of the company. Most analysts use the other method for calculating the PEG Ratio.


Which Guru Screens is PEG Slater used in?
Growth Investing:

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