If you’re worried by the volatility of SpaceX shares, you might want to consider buying FTSE 100 growth shares instead. I haven’t bought the US stock for my own portfolio. I don’t intend to, and certainly not when it’s trading at anywhere near today’s share price.
SpaceX was valued at $1.78trn at its IPO earlier this month. Today, it’s worth $2.13trn, which is roughly three-quarters the value of the entire FTSE. For a company that’s yet to turn a profit — and isn’t expected to do so until 2028 at the earliest — you may see why I’m not tempted.
And why should I be? Sure, returns on SpaceX shares could rocket (no pun intended) if business at its Starlink satellite network surges. But there’s plenty of shares back here on Earth that are already delivering spectacular shareholder profits.
Take Games Workshop (LSE:GAW) and Sage (LSE:SGE). I hold both these FTSE 100 stocks in my Self-Invested Personal Pension (SIPP). And adding more of their shares to my portfolio is a far more attractive scenario for me than buying SpaceX shares.
Here’s why.
A 4,271% rise
Both SpaceX and Games Workshop shares appeal to the ‘inner nerd’ in me. The first speaks to my interest in space travel and watching sci-fi movies set in distant galaxies. The other taps into my love of building and painting miniatures and fantasy storytelling.
Yet my admiration for Games Workshop goes beyond the models, games and books its manufactures. I’m also impressed by the exceptional share price gains and dividends I’ve enjoyed down the years.
Over the last decade, the Warhammer maker’s share price has risen a staggering 4,271%. And I’m confident its shares can keep marching higher as profits soar, even as rising competition from other games manufacturers poses a danger.
Core revenues are expected to have risen at least 11% in the 12 months to May, latest financials showed. This is driven by soaring global interest in fantasy gaming. Games Workshop has a stranglehold on this booming industry.
A dirt cheap FTSE share
While Games Workshop continues to head higher, Sage shares have fallen sharply more recently. They’ve dropped on fears that the emergence of AI could damage subscriptions at the software company.
It’s a danger, sure. But it’s one I feel is overstated. So with a price-to-earnings (P/E) ratio of 18 times, I think this FTSE 100 tech titan’s worth serious consideration as a ‘dip’ Buy. Its trading well below the 10-year average of 31-32.
I’m sure plenty of companies will switch their accounting, payrolls and HR activities to AI models. But will they do this in large enough numbers to disrupt Sage’s model?
I’m not so sure. Its services are cheap, and will firms really want to farm out mission-critical activities to AI models? Especially when Sage is integrating AI into its own products? Latest financials showed organic sales up 10% in the six months to March.
Sage’s share price is up 35% over the last decade. I think it could pick up momentum thanks to its own AI investments, and as global businesses increasingly digitalise their operations.
Should you invest £5,000 in Games Workshop Group Plc right now?
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Royston Wild owns shares in Games Workshop and Sage.
