Stock Screens 

Slater small-cap stocks surge

Slater small-cap stocks surge

Last year I made a change in the way I ran my Jim Slater inspired Small Cap screen based on suggestions from the great man himself before he sadly passed away at the end of 2015. With valuations high, my original tactic to make the screen produce results had been to stick with a strict valuation criteria (a price-to-earnings-growth ratio of less than 0.75) but allow a looser quality criteria. Mr Slater, however, took issue with this advancing the view that when valuations are high, the PEG requirements of his stock-picking system can be relax but investors need to double down on quality. Naturally, I adapted the screen when I ran it last year to take Mr Slater’s advice on board. The result? A knock-out 71 per cent total return over 12 months from the six stocks picked by the screen. And while small caps in general had a storming run during the period, the return from the screen were still more than double the average return from the FTSE Small Cap and Aim All-Share of 35 per cent.

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