Games Workshop Share Discussion Threads

[nfs] 01/8/2020 15:49

Thanks, for this and all your views on GAW. Makes sense to me, as it's H2 that was affected and thus the impact is greater at 26/20 vs 52/46, and separate out royalties.

[cockerhoop] 01/8/2020 14:29

nfs,

I think it's more accurate to do the following:

Take H2 revenue of £121.3m div by 20, mult by 26 to get £157.7m

Apply H120 op margin of 32.7% to get £51.6m pre royalty op profit

Add H2 royalty of £6.1m to get PBT of £57.7m

Apply a 19% tax charge to get £46.7 pat

This equates to 143p EPS in H2, add to 145.9p in H1 to get £2.88 EPS for the FY

Probably a little high as in normal times a staff bonus would probably have been paid in H2 and May will have been very good as some online trade outlets were open during the lockdown and therefore needed restocking.

[robinnicolson] 01/8/2020 12:27

Lindsell Train still do not own shares in Games Workshop, although it ticks so many boxes in the companies they seek: niche, strong brand, IP, 'entertainment'. They own Nintendo in their global fund.

Thanks for the recommendation nimbo1. I may well order Christopher Mayer's book.

[nfs] 01/8/2020 11:26

Can i check numbers with people in here please?The company says it lost 6 weeks of sales and profits So I take the reported 218p eps * 52/46 to give about 246pSo i don't think it's madness to use that as a base and project forward say 25%- the growing royalty income could swing that up or down- and use 300p ( I rounded to the nearest big number) as earnings for the year ahead. So a PE around 30?

[nimbo1] 01/8/2020 10:10

Out of interest I think the book train read before writing that article is titled '100 baggers' - I would recommend you read a copy - its inspiring and makes you think about investing in a slightly different way.

I’m not quite sure why he’s never bought gaw before

[nod] 01/8/2020 05:56

Robin, there is some wise advice in that short paper by Nick Train. I like the quote of Thomas Phelps from nearly 100 years ago...

“In Alice in Wonderland one had to run fast in order to stand still. In the stock market, the evidence suggests, one who buys right must stand still in order to run fast.”

[nod] 01/8/2020 05:46

Fatshark, who love Warhammer and developed the hit Vermintide, is currently developing Darktide. Microsoft gave a heads-up at its recent show. Some comments from Fatshark...

"So, what is Warhammer 40,000: Darktide? We’re sticking with a formula we know and are known for – 4 player co-op first-person action in a rich, established universe with lashings of attention to detail to serve existing 40k fans and onboard new players to that grim-dark world.

Everyone in the studio is absolutely enthralled with the Warhammer universes created by Games Workshop. Many of the founding members of the studio met through playing tabletop Warhammer games, and from those experiences and the love for the franchises the concept of Vermintide and, in turn, the upcoming Darktide, was born. Anyone who knows Warhammer Fantasy can tell you how well we captured that world in Vermintide, so you can expect even more love and uncompromising levels of detail to be poured into our slice of the Warhammer 40k universe with Darktide."

[nimbo1] 31/7/2020 10:29

I think you are right. Its valued fully but fairly for its cashflow imo.

The IP and the future AAA games / film etc are v supportive of future gains.

[sogoesit] 31/7/2020 10:17

Trailing P/Es:
GAW - 42
EA - 29
ATVI - 39

So, on a revenue generating basis doesn't look over-valued to me.

Prospectively, it looks undervalued as well:
Say it grows EPS one year forward by 15% making forward EPS 252p.
Awarding that the current 42x gives a forward share price of £105.

If the argument is that 42x is an overly high rating for growth of 15% (PEG > 1) then the franchise and quality accounts for the remainder that the market seems willing to pay. (What kind of additional revenue could it generate from Eisenhorn or similar media rights?)

[robinnicolson] 30/7/2020 16:15

40 bagger...outstanding Nod!

I have linked to this Nick Train article before on multi-baggers and valuation but I think it's worth re-reading.

"hTTps://www.lindselltrain.com/~/media/Files/L/Lindsell-Train-V2/investment-insights/2019/What%20Makes%20Us%20Think%20and%20What%20Were%20Thinking%20About%20-%20January%202019.pdf"

[epo001] 30/7/2020 13:52

I'm up 200% so that makes it a 3-bagger apparently. Then of course, there are the dividends... If only my other holdings had done as well.

[nod] 30/7/2020 12:22

Back in 2008, after ups and downs, ins and outs, I placed a small bet at just under 2 pounds. I did not envisage a 40 bagger.

[nod] 30/7/2020 12:15

I like your optimism, Robin.

[robinnicolson] 30/7/2020 11:25

I agree with you regarding the current valuation. However I am not sure about it being too late for it to be a ten-bagger for you. A c. £30 billion market cap. would be equivalent to the current market capitalisation of Electronic Arts or eBay for example. It might take a decade + but there is still huge long term global growth potential for Games Workshop.

[epo001] 30/7/2020 11:05

I am well in profit on this (2-bagger) and happy to see dividends resume. But. It is priced for perfection, and any slowdown or stumble will be punished harshly. For that reason I won't buy more unless the March drop repeats. I think I got in too late to see it become a 10-bagger for me but I would be very happy with above inflation capital and income growth.

[samsousa] 29/7/2020 17:58

6q2z5xbtrfn n 8jnn tb h.e car is 3nnmnnnnm7 vvi v yccccccccccnoom..ckn n ..nem.b

[rndm355] 29/7/2020 17:51

Described as a perfect share in this report:

[pob69] 29/7/2020 09:34

Checking the FTSE tab on this helpful resource you can check various positions (though the current ranking makes no reference to recent rise!)

[epo001] 29/7/2020 09:24

Realistically, and at today's prices the capitalisation has to get above 4, probably 4.5B to qualify for promotion to the 100. Presently it is is larger than the smallest FTSE-100 company but so are 15 or so FTSE-250 companies.

[robinnicolson] 29/7/2020 09:05

With a market capitalisation of £3.07 billion, Games Workshop was ranked 117th in the FTSE-350 at yesterday's close.

[nod] 29/7/2020 07:07

Nice press comments ...

Games Workshop is star player as value tops £3bn


Games Workshop shrugs off pandemic as profits jump


'Wow, what a year!' say Games Workshop bosses after record sales

[life share] 28/7/2020 20:12

Excellent day for everyone here. I was in at £43 and kept buying till £85 with average cost of £50 per share. Thanks again for GAW. Cheers

[greyingsurfer] 28/7/2020 15:53

I think you may have done better than me, Shanklin. I sold all mine at just over 60 on the way down and lacked the confidence to get back in. Well done to all who held!

[robinnicolson] 28/7/2020 15:42

FT:

"At almost £3 billion, its market values now almost twice that of Frasers, the company that owns Sports Direct, House of Fraser and Flannels.

Andrew Wade, analyst at Jefferies, said without the hit from Covid-19 profits could have surpassed £100 million for the first time."