If I’d invested £1,000 in Games Workshop shares 10 years ago, here’s how much I’d have now!

At the end of March 2013, the Games workshop (LSE: GAW) share price at 634p. As I write, it’s 9,526p. It has increased by 1,402% in a decade. An investment of £1,000 (technically £1,001.72 to get all the shares) at that time would buy 158 shares in a miniature hobby company whose main brand is Warhammer and Warhammer 40,000.

The shares would be worth £15,051 today, for a total profit of £14,049. I think numbers like that demonstrate the long-term investment value quite clearly.

The decision to buy

I didn’t buy Games Workshop shares ten years ago. I didn’t invest at that time. I didn’t buy it after 50% was wiped off its value during the coronavirus market crash of March 2020. It continued to rise 245% to its peak in September 2021.

At this point, I follow the company, and I like it. It’s booming when people turn to games of all kinds to escape the tedium of the lock. However, with a price-to-earnings (P/E) ratio of over 30, I think the stock is expensive.

Then came the opportunity. The market turned to growth stocks and pandemic winners at the end of 2021. In October 2022, Games Workshop shares fell 50% from their all-time high. In November 2022, I bought, when the P/E ratio returned below 20.

I am struggling to decide to buy. I can’t help but look back at the price history and think that perhaps most of the gains have already been made. However, I ended up ignoring the price chart. However, I asked some important questions from the company.

Game master

The first question is whether Games Workshop is well managed. I thought that it was and still is. The manager always has a clear and simple strategic plan. They take ownership of mistakes instead of blaming external factors for everything. And, looking at long-term revenue growth and impressive company profitability shows that they know what they’re doing.

The second question is whether the company will be bigger in 10 years. Again, I answered yes. Social media has helped build a large community around the core business of fantasy miniatures. Amazon has signed a deal to make TV shows and movies based on the company’s intellectual property. Long-term plan to get triple-A Warhammer video games made have probably become more likely as a result.

I thought the prospects for Games Workshop looked good in the long term. So, I bought it and put my fear of stock price history to one side.

Games Workshop share price history

So far my purchase is going well. Hopefully, keep it up. Can I expect a 1,400% return over the next 10 years? It would be nice, but it’s not. In fact, I don’t know where Games Workshop’s share price will end up.

My assessment of the company’s potential may be wrong. Things can change and I am prepared to reconsider and reconsider as the months and years go by. But now, and when I bought the stock five months ago, I believe that the price will be higher in the long term than it is now.