- Games Workshop's valuation has come down – is it worth buying now?
- Plus a reasonably priced 'picks and shovels' infrastructure play.
This week we revisit the investment case for Games Workshop – one of the darlings of the UK stock market during the Covid-19 pandemic. We also take a look at an important US infrastructure supply chain business that is still reasonably valued and well placed to continue growing thanks to exposure to America’s need to upgrade its energy grid network.
Games Workshop (GAW) has been a fantastic long-term investment. Anyone who has possessed both the patience and good fortune to own the shares for the past decade has achieved a total return from their investment of 1,450 per cent.
Not one company currently listed on the FTSE All-Share index has performed better, while the index itself has returned 60 per cent over the same period.
The past three years have not been as rosy despite the company’s business continuing to perform well. The shares have returned just 12.5 per cent, while the All-Share has delivered 40 per cent.
As with any company that has been successful, the key question is whether this can continue. The good news is that Games Workshop has plenty of spare capacity to accommodate future growth having invested heavily in land, warehousing, tooling and marketing over the past few years.
PLUS: A reasonably valued play on America's need to update its energy grid
Two of the biggest growth themes in the US right now – and many other parts of the world – are the electrification of products in order to cut carbon dioxide emissions and the replacement and upgrade of ageing infrastructure.
One investing strategy is to buy the shares of electric vehicle and battery makers or construction companies. The alternative is to go a little deeper and invest in companies within the supply chain who are exposed to these growth themes. This is where US company Hubbell (US:HUBB) may be of interest to investors.
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