My fellow writers on The Motley Idiot have been bigging up FTSE 250 development inventory Video games Workshop Group (LSE: GME) for years. Some have fallen for it arduous.

Ben McPoland named the tabletop miniature gaming grasp his favorite FTSE 250 inventory and even devoted a playful Valentine’s ode to it in February, the place he presciently stated it was “destined for a promotion to the FTSE 100“.

I received’t be writing an ode to Video games Workshop. Extra like a lament. As a result of whereas I used to be nicely conscious of its appeal, I by no means received spherical to purchasing it.

Video games Workshop is taking part in to win

And now it’s getting ready to FTSE 100 glory after the shares jumped one other 25.5% during the last 12 months. Over 5 years, they’re up 139.34%.

With Video games Workshop anticipated to affix the blue-chip index when the subsequent reshuffle is introduced on 4 December, it’s attracting much more optimistic consideration.

This morning (28 November), Hargreaves Lansdown praised its “prowess at the full sweep of production design, manufacturing, distribution and retail” that has made it a “global leader”.

Large hit Warhammer 40,000 is probably the most profitable miniature conflict sport on this planet. Its tenth version drove report revenues, boosted by its online game licensing.

This push into licensing might drive additional development, as Amazon appears to develop the Warhammer universe into movies or TV collection.

I’m all the time cautious of shopping for shares after a powerful run (and have missed out on loads of high momentum shares because of this). However this means Video games Workshop has the potential to energy on.

The share’s outlook is a bit binary

On 22 November the Video games Workshop share price surged 16% to hit yet one more all-time excessive, after the board lifted half-year steering on the again of better-than-expected latest buying and selling.

Pre-tax earnings are forecast to hit at the least £120m for the six months to three December. That’s up 25% from final 12 months’s £96.1m. Core revenues could high £260m. Licensing revenues from video video games, books, merchandise are heading previous £30m.

Right now, simply three analysts provide one-year price targets on the inventory (a quantity that may certainly rise). They’ve set a median share price goal of 12,850p. That’s truly down 6.17% from at present’s 13,840p. This stokes my worry that I’m coming to this too late. Though all three nonetheless label it a Robust Purchase.

Video games Workshop’s shares aren’t low-cost, unsurprisingly, with a price-to-earnings ratio of 29.2. Nevertheless, the yield of two.72% is greater than I anticipated. The board appears eager to ship dividend development, as this chart reveals.

Chart by TradingView

Video games Workshop understands its clients and has a powerful steadiness sheet and loads of money to fund development. My large fear is the Amazon tie-up. A profitable collection might raise Warhammer to a different stage, however what if followers are disillusioned? That’s all the time a danger with cult mental property like this.

One other danger is that it by no means occurs in any respect, and the share price slumps. This inventory is a little more binary than I’d like. I would simply have to simply accept that I’ve missed the motion, and go away it’s. Though I think I’ll be penning one other lament within the months to return.