Eyebrows were raised when Leicester broke their transfer record to sign Ulloa from Brighton in the summer.
The Foxes paid an initial £8million fee, which could rise to £10million, for the striker even though he had just one season of experience in English football before moving to the King Power Stadium.
The 28-year-old has had no problems adapting to the top flight, though
On Sunday he took his tally to five goals in five matches with a well-taken brace in the shock win over Manchester United.
Given that Diego Costa, who cost Chelsea four times as much, is the only man to have scored more goals than Ulloa this season, Nugent thinks the acquisition of his Leicester team-mate is proving to be a shrewd bit of business by the east midlands club.
"Leo has been a revelation so far," said Nugent, who scored a penalty in the hugely impressive 5-3 win.
"He has come in from Brighton and he has scored lots of goals
At £8million he has turned out to be a bargain."
Bookmakers have cut the odds on Ulloa topping the scoring charts at the end of the season from 80-1 to 33-1.
They have also lengthened the price on Leicester being relegated after their successful start to the season.
Nigel Pearson's side, who won the Championship last year, have taken eight points from five matches.
Given that they have already played Arsenal, Chelsea and 20-time champions United, the Foxes are taking delight in silencing their doubters.
"When the fixtures came out, with the start we were given, no one expected us to get any points, so we are proving everyone wrong," said Nugent, who has played in the top flight before with Portsmouth.
"They can write us off all they want, but we know in this squad we have the spirit, the energy, and the players to cause teams problems as we showed against Manchester United."
The Foxes lost two and won 17 of their 23 matches at home last season.
Now Leicester are looking to make teams fear coming to the King Power Stadium this season.
"It was important to win at Stoke (the weekend before last), but our home form is very important to us," Nugent said.
"We have to make this place a fortress."
Source : PA
Source: PA