What they do

Games workshop are the owners of the Warhammer and Warhammer 40k fantasy universe. Most people will have only seen them if you’ve ever walked past one of their shops in the high-street and seen it filled with teenage boys playing with the figurines.

Alongside the figurines the company also has stakes in multiple computer games and novels all based in the same fantasy universe.

Imagine a sci-fi version of Disney with guns and magic.

Pros

Very little competition – There are several fantasy worlds created by sci-fi authors that customers can immerse themselves in, however there are none which come with as many games/novels/tabletop games as Games Workshop. Specifically the tabletop aspect, if customers want to take part in a tabletop battle there are no alternatives in the same league.

Quality – The figurines themselves are often seen as being very expensive, (1 toy tank for £40?) the reason for this is the quality  put into creating the molds. The models this company make are at the exact opposite end of the spectrum to the cheap green toy soldiers you got as a kid that were made in China. The only other company making plastic molds at this quality and quantity I can think of is Lego.

Good shop staff – If you ever enter one of their stores you’ll notice how well educated and passionate all the staff are about the hobby. It seems they only recruit people who know their games already. The staff are always happy to discuss the hobby with new players and encourage everyone to have a go at playing a mini version of the game without being too pushy.

Director Dealings – Not much activity but 3 purchases showing in the last 6 months.

Dropping Liabilities – The liabilities showing on the yearly report have been dropping every year.

Cons

Fashion – Whilst sci-fi and fantasy worlds will never totally disappear they are definitely affected by what is currently “cool” in popular culture. There’s no way of predicting how this sort of hobby will be seen in 5-10 years time.

Financials – I like to see slowly rising revenue/profit/assets/dividends however looking back a few years these figures have been a bit random for GAW which suggests there are forces outside the companies control which cause large swings in the share price.

Recent price rise – Since the company had good results posted in November the share price has risen from £5.61 to £8.45 (as of 22/1/17). Whilst this rise isn’t shocking based on the good results it does mean you should question how much higher is can go before correcting itself?

Summary

I originally started looking at GAW in December when visiting my parents house and finding a box of my old figurines. Buying at that time would have been a great option. However with the 50% rise since then I’m leaning towards thinking its just one to add to my watchlist.

The FTSE100 still hasn’t dropped since xmas so potentially when it goes down in a few months GAW will drop also and become worth buying as its a good company which I expect will keep making a profit for a long time to come.

Disclaimer – Not sure if I need this here or not but just in case anyone is confused, I am not a financial advisor and this post is not investment advice to anyone. It is simply a summary of the research I did myself when looking for shares to buy myself.