Each candlestick on this chart represents 12 months. This highlights both the strength of the uptrend and the most important chart breakouts. I feel guilt for taking my eye off the ball on this one because there was a spectacular breakout in 2024 when the shares broke decisively through £100.
Games Workshop is a classic Warren Buffett stock. A unique, superbly managed business with a globally developing brand, long-term values and a dedication to producing something wonderful for the customers.
What people used to say about Games Workshop is that it was mainly for boys who loved it until they discovered girls. Then there was a theory that video games would be so engrossing for Games Workshop’s traditional customer base that the company would go ex-growth and dwindle to servicing a rump of hardcore fans.
This pessimism turns out to have been unwarranted. Kevin Rountree became CEO on 1 January 2015. If you look at the chart, this is when the shares began to take off. His predecessor, Tom Kirby, did a great deal to create the Games Workshop that could do well, but he was excessively prudent with cash and ran the company virtually single-handed.
Rountree brought a different philosophy. He was ready to invest; in particular, he made the company more professional by bringing in management at all levels to focus on taking the business forward. The two things that have been game changers for Games Workshop have been sales to independent retailers, which require less investment than opening their own shops, and generating royalties from licensing, which Kirby was reluctant to do for fear of contaminating the purity of the brand.
Sales to independent retailers began to grow dramatically when Games Workshop had the management infrastructure to properly service this market. Licensing sales, which have the attraction of being almost pure profit, exploded when Rountree took the brakes off.
In the latest year, GAW made total profits of £261m, of which almost £50m came from licensing. On top of that, the company has done a deal with Amazon to exploit its IP, which may take two or three years to show results but should be significant.
Licensing may also help GAW hold customers for longer. They start with the models, many will stay with them for years, if not forever, but the ones who grow out of modelling may still consume the brand through licensed products, which have grown strongly as a proportion of total profits since Rountree took charge.
His work to beef up management has also enabled the company to expand its reach globally. Games Workshop’s wargaming worlds, like Warhammer, are truly international products and arguably are at least as appealing to Asian customers as they are to Europeans.
Games Workshop’s customer base runs into the single millions. There are an estimated 500m to 550m boys worldwide between 10 and 14 years old, so they have a huge market opportunity. Many girls like the products too and feel less shy about admitting it.
I will be adding Games Workshop to my Top 50 list.
I have also found something striking about Applovin. The company recently did a question-and-answer session with Morgan Stanley. At the end of the session, Applovin CEO, Adam Foroughi, said something dramatic about prospects, not that he ever holds back.
The way I think about it, and this has been helpful for investors to understand, is that I talk to our team that’s doing this growth marketing testing right now and say, look, a great outcome next year would be if we could spend $1 million a day in advertising, and we’ll do sponsorships, we’ll do advertising, we’ll do more media, we’ll do podcasts, but if you combine it all and we spend $1 million a day, and it costs us $2,000 to sign up a new customer that goes live on our platform, you’d spend $365 million over the year, and you would get 182,500 new customers in one year. Now, recall that we’ve disclosed we only have thousands of customers.
Adam Foroughi (CEO, AppLovin): If the number can ramp up that quickly with a number that’s very immaterial against a revenue base, so you wouldn’t even expect much of a margin impact, this business is going to be off to the races. We think it’s doable. The second we’re ready to do it, we’ll open up the platform. We’ll be talking about it with investors. And certainly, the small businesses in the world will start seeing that opportunity out there for them.
Morgan Stanley, Annual Nasdaq Investor Conference, 9 December 2025.
They are not ready yet, but they are on their way. This business looks poised to explode, possibly in 2026 or 2027, but it is making progress, and shares always anticipate.
Share Recommendations
Games Workshop. GAW
Applovin. APP
Games Workshop was featured in the first alert sent out by Quentinvest.
