Mark Slater: UK growth companies are now ‘value’ shares

TL;DR

Growth investor Mark Slater discusses his investment philosophy, focusing on profitable businesses with double-digit earnings growth sustained over a long period of time.

Transcript

hello and welcome to the latest Insider interview Our Guest today is Mark Slater manager of the Slater growth fund mark thank you very much for coming in great pleasure you are a growth investor investing in the UK is that a contradiction um growth is something that means different things to from people in the same way that value does these are ver... Read More

Key Insights

• ⌛ Growth investing can encompass different definitions, and Slater's approach involves profitable companies with double-digit earnings growth sustained over time.
• ✋ The UK market offers favorable opportunities for finding high-growth companies compared to the US market.
• 🧡 Slater's investment strategy involves analyzing sector dynamics, competitive positions, long-range plans, and cash flow to identify reliable growth opportunities.
• 🛩️ Smaller companies in the UK market are currently undervalued and present attractive investment prospects.
• ❓ AIM (Alternative Investment Market) companies are not disregarded by Slater, as some of them offer significant growth potential.
• 🛩️ The discount between small and large companies might be a result of fashion trends and liquidity concerns.
• 🦸 Tesco and Cranswick, though not super dynamic, offer steady double-digit growth potential and attractive valuations.
• 👨‍💼 Slater's investment focus avoids capital-intensive and cyclical businesses.

Questions & Answers

Q: What is Mark Slater's definition of growth investing?

Mark Slater defines growth investing as investing in profitable businesses with double-digit earnings growth sustained over time.

Q: How does the UK market compare to the US market in terms of finding high-growth companies?

According to research by Schroders, the UK market has a higher probability of finding companies that increase in value tenfold compared to the US market.

Q: What criteria does Mark Slater use to select growth opportunities?

Slater looks for forecasted growth, the ability to buy growth at an attractive price (measured by the PE-to-growth ratio), and strong cash flow as a sanity test for profit reliability.

Q: How does Mark Slater assess future growth potential in companies?

Slater focuses on analyzing the sector, a company's competitive position, long-range plans, risks, and opportunities during conversations with management teams.

Q: Which companies has Mark Slater recently bought and why?

Slater recently invested in Franchise Brands, which he considers a first-class business with a strong management team and growth potential. He also bought shares in Lounge Group, a leading leisure operator with significant growth opportunities.

Summary & Key Takeaways

• Mark Slater focuses on growth investing in the UK market, seeking double-digit earnings growth in profitable businesses.

• The UK market offers higher probabilities of finding companies that grow significantly compared to the US.

• Slater's investment strategy involves analyzing the sector, competitive position, and long-term plans of companies to identify reliable growth opportunities.