Games Workshop (LON:GAW) issued its half-year report today, sending the share price down 24%. Ouch. Not a good one, then.

Paul Scott wrote about it more eloquently than I ever could: , and says that a price of:

“350-400p level as being where I would start to get interested”

Free cashflow over the last 4 years is a mean of 51.1p, so if the share price made it down to 500p, they’d be on a P/FCF of around 10.

Interim dividends have not been declared, which seems suspiciously iffy.

I don’t get GAW. It should be a perfectly straightforward and stable business, yet it seems to be on such a rollercoaster operationally.

I’ve been stung investing in GAW in the past before. GAW seems back to square one, with revenues and operating profits at roughly the same level as a decade ago. Although it has a good “franchise”, it’s very difficult to expand it. Consequently, the company coasts along not doing much of anything. The share price tends to reflect the lack of growth prospects, so, even if fairly cheap, you are not likely to make much money.

Then, out of the blue, something like today happens. It’s one of those “general value shares” where there’s not terribly much in the way of upside, “generally” not too much in the way of downside, but with the possibility of “black swans”. You can see this sort of behaviour with the supermarkets over the last couple of years. It’s actually the kind of share that I tend to avoid nowadays; although it might be interesting at the right price.

Interestingly, the market seems to have smelt a bit of a rat in the company since about October 2013, where it has been performing inverse to the market. It’s not clear what the tip-off was; although I haven’t been following GAW for a long time.

Not a holder, thankfully. I see this as going nowhere over the next 6 months or so.

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