There aren’t many FTSE shares from my best stocks to buy now list that have experienced close to a 2,000% price rise in the past five years. Games Workshop (LSE:GAW) is one such stock and I still think it could be a great stock to buy.
FTSE 250 opportunity
Games Workshop is setting the gaming world alight. The FTSE 250 incumbent is a British manufacturer of miniature figurines, war games, and fantasy figures. It’s best-known product is its Warhammer range which has skyrocketed in popularity around the world.
GAW is on my best stocks to buy now list due to its unbelievable rise, as well its ability to navigate economic fluctuations and continue to grow. I particularly like the fact that GAW is expanding its geographical footprint to capitalise on its popularity. There has been massive overseas demand for its products and sales from foreign markets are increasing regularly.
Share price and recent performance
There aren’t many shares on the FTSE 250 that have experienced a share price increase like GAW. Crunching the numbers, GAW has risen by close to 85% annually over this five-year period. As I write, shares are trading for close to 10,200p per share. This is still an approximate 50% rise compared to this time last year. This slight drop off can be attributed to the global pandemic as well as the ensuing market crash.Â
In last month’s half-year report, GAW reported record sales, profit levels, and cash generation. Expansion strategies seemed to be reaping rewards with a special mention of significant sales in North America. GAW reported the Covid-19 pandemic had majorly affected the opening of its 529 retail stores. Online sales offset these closures. Overall sales rose by 26% and pre-tax profit rose by 6% compared to the same period last year. Furthermore, a dividend of 80p per share was also declared. Many firms across the FTSE have cut dividends to conserve cash so this is another positive in my eyes.
Best stocks to buy now have risks but great rewards
Games Workshop is facing challenges dealing with copyright issues as 3D printing of the company’s premium figurines is on the rise. This poses a risk to GAW as an investment as it could could affect sales figures. Piracy is a major issue in the gaming sector. In addition to this, GAW shares currently trade on 30 times 2020–21 forecast earnings. This could be considered expensive.
To me, the Games Workshop share price still looks good. In the face of the pandemic, Games Workshop has generated healthy profit margins and earnings growth in the past year. I believe that, once things do return to normal, GAW could thrive even further.
GAW is on my list of best stocks to buy now from the FTSE 250 due to its unrivalled success. I also look to make a passive income, and here is one of my FTSE 100 picks to help me do that.