In 2014, Tom Kirby, the chairman of Games Workshop, told shareholders that it had been “a really good year” for the company. But the boss of the fantasy games and miniatures maker warned:
“If your measure of ‘good’ is the current financial year’s numbers, you may not agree. But if your measure is the long-term survivability of a great cash generating business that still has a lot of potential growth, then you will agree.”
In a way, Kirby’s comment underlined a question that’s nagged investors in Games Workshop in recent years. Is it a niche retailer in a dying market, or is it a business with a loyal, big-spending fanbase that’s utterly misunderstood?
For now, the answer is that Games Workshop has proved its doubters wrong. Over the past three years it has shown how a stock that was once an unloved contrarian value play can go on to reward investors handsomely. After three years of lacklustre price performance, it has raced to an all-time high this summer – rising 125 percent in 2017 alone. But could you have seen it coming?
The profile of a contrarian share
When Kirby (who was acting CEO at…
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