Despite markets treading water in the wake of the US/Iran stand-off, a small number of UK stocks keep setting record highs.

Is this a sign for investors to consider buying more? Or is now the time to be cautious? Let’s look at two examples.

Top performer

Fantasy figurine maker Games Workshop (LSE: GAW) has been one of the best investments of the last decade. Had anyone put £5,000 to work in the stock in April 2016, they’d now be sitting on a stake worth over £200,000! And that’s not even factoring dividends into the mix.

Yes, there’s been a bit of volatility along the way. The shares pretty much halved in value as inflation raged in 2022 following the pandemic. But investors quickly returned, lured by a great growth story and astonishing fundamentals.

In January this year, the company dropped another excellent set of half-year numbers. Revenue rose 10.9% while core operating profit hit £126.1m.

Is it now too expensive?

The only issue with all this is that the shares are now very expensive. To some extent, this is justified considering how big its margins are. Boasting a lovely amount of net cash, the balance sheet is a thing of beauty too.

Tellingly, there’s also been a lot of director buying over the years. If those most aware of how the company is faring are willing to put their own money to work, that’s usually a very good sign.

Even so, a price-to-earnings (P/E) ratio of 35 for the current financial year is looking a bit frothy. The risk here is that expectations will exceed reality and any slight disappointment — such as earnings meeting rather than exceeding forecasts — will lead to a sell-off.

This is a brilliant business that commands huge loyalty from fans. But I wonder if the best time to load up is when markets next crash. No one knows when this will come, of course. But we can be pretty sure there will be opportunities ahead.

Record numbers

IG Group (LSE: IGG) has been another winner for investors, albeit not to the same extent. It’s climbed 45% in value in the last 12 months alone and also sits at an all-time high.

This is all pretty impressive considering the company has traditionally had more appeal for income investors than those looking for share price growth.

IG’s surge isn’t a mystery. Back in March, it posted record annual revenue. The launch of a strategic review that could include acquisitions and industry tie-ups also got investors excited.

Apples and oranges?

But there are a few notable differences. While Games Workshop is dominant in its niche, the £5bn cap operates in very competitive space. IG Group often faces regulatory pressure but Games Workshop is devoid of such scrutiny.

This partly explains why shares in the online trading platform provider change hands at a P/E of 13. That’s a lot cheaper than the aforementioned FTSE 100 stock, even though it boasts similarly great margins.

Still, there’s no reason why IG Group can’t continue ascending. Momentum is a powerful force in investing. Importantly, IG also makes more money when markets get jittery than when all feels rosy, potentially giving owners a nice hedge.

Of the two, I think this one warrants more consideration.