Games Workshop (LSE: GAW) shares have climbed over 40% in the last six months. 

The FTSE 250 manufacturer of miniature wargames has gone from strength to strength, growing its market value to £4.5bn which makes it, according to the latest data I have, the 89th largest company of those eligible for the FTSE 100. 

If nothing changes then the firm looks like a dead cert for the UK’s premier index. 

IP strength

While a seat at the table with the big boys won’t affect things too much – outside of a dose of prestige and a possible share price jump as Footsie index funds rush into the stock – it’s a sign of how well the company has performed in recent times. If I didn’t already own a position in the company then I’d buy the shares in the Warhammer brand owner today. Here’s why. 

The primary reason stems from the strength of the firm’s intellectual property or IP. A good IP engenders serious loyalty and gets customers to open their wallets for all manner of products. 

The Lion King remake was one of the largest-grossing films ever made. Was it because folks wanted to go to the cinema to see a story about expressionless CGI lions? No! It was the IP! They had fond memories of the first movie and were happy to spend money to see Simba and the gang again.

Evidence for the strength of the Warhammer IP comes via the video game world. For those not in the know, the gaming industry is in something of a crisis. Formerly venerated AAA developing studios are churning out flop after flop. I’d need the fingers of both hands to count the notable failures this year alone. 

In amongst the tumult, along popped a little game called Warhammer 40,000: Space Marine 2 and it sold like hot cakes. In just a couple of months, 4.5m copies flew off the proverbial shelves. One insider claimed it was selling faster than any of the Doom or Quake games. 

Big impact

The impact for Games Workshop is the firm expects to triple its licensing royalties this year from £13m to £30m. That’s a handy addition to the firm’s overall top line of £260m, and remember, licensing out IP is a very high-margin endeavour. 

A sequel to the game probably won’t be far away either, but the real benefit is the exposure to the brand.  How many kids might ask mum and dad for a Warhammer set for Christmas after playing this new cool computer game? Quite a few I would guess. 

Is this a risk-free investment? Of course not. No stock is. And one of my larger concerns is that the firm’s insistence on UK manufacturing means pricey products leave them exposed if cost-of-living issues worsen. 

On the whole though, I think this a stock investors should consider. The company will celebrate its 50th anniversary next year and I wouldn’t be surprised if the strength of the brand and company thrives for another 50.