As speculation about a potential stock market crash this autumn arises, investors are eyeing opportunities to acquire growth stocks at more favorable prices. Among the companies under consideration are three prominent UK firms—Games Workshop Group, RELX, and Halma—each presenting unique prospects and challenges.
Games Workshop Group, known for its Warhammer franchise, has been a standout performer since its entry into the FTSE 100 last December. The company reported record annual results in July, with pre-tax profits soaring by 29.5% to £262.8 million. Over the past year, shares have increased by 38%, although they recently dipped by 5%. Currently trading at a P/E ratio of 27.1, the stock remains significantly above the average FTSE 100 P/E of around 15, suggesting it may be priced on the higher side. The upcoming trading update, scheduled for September 17, is anticipated to confirm the company’s continued alignment with full-year targets. Additionally, Games Workshop is poised to increase shareholder payouts, with total dividends expected to reach 225p for the fiscal year ending June 2026, a substantial increase from the previous year’s 100p. However, as the company explores broader brand appeal, including television streaming opportunities, there are concerns that it may risk alienating its core fan base. A sharper decline in share prices could present a more attractive buying opportunity.
Next on the list is RELX, an information and analytics leader that serves clients in over 180 countries with subscription-based decision-making tools. Having seen a remarkable 95% increase in stock value over the past five years, RELX’s share price has stumbled, declining by 4% year-on-year, largely due to a 12% drop in September. The most recent half-year results, announced on July 24, showed robust performance, with adjusted operating profits rising by 9% to £1.65 billion, alongside a 7% increase in dividends to 19.5p. Despite its solid fundamentals, a high P/E ratio of 29.5 has raised concerns about valuation, particularly given the pressures facing corporate budgets due to persistent inflation and elevated interest rates. While the integration of artificial intelligence offers potential enhancements to RELX’s services, it may also enable clients to develop in-house solutions that could threaten the firm’s market position. Nonetheless, the company’s consistent track record of dividend increases, having raised payouts for 14 consecutive years, positions it as a noteworthy income play for diligent investors.
Lastly, Halma, a global leader in health and safety technology, has also attracted attention. The firm’s share price surged by 27.5% in the last year and an impressive 60% over the past two years. However, with a valuation that places its P/E ratio at nearly 36, Halma ranks as the highest-valued among these stocks. Despite its trailing yield of only 0.69%, the company has a remarkable history of increasing dividends for 45 consecutive years—a testament to its reliable performance. Yet, certain risks remain, including potential impacts from currency fluctuations and tariffs. Investors may find Halma appealing, particularly if a broader market correction provides an opportunity to purchase shares at a more attractive valuation.
Considering the prospects and inherent risks of these three growth stocks, they all represent potential investments for patient, long-term investors. Should a significant market downturn materialize, the temptation to dive into these stocks at lower prices could prove irresistible for many market watchers.
