Investing in FTSE shares is a proven method to reach millionaire status in the long run. The London Stock Exchange is home to thousands of businesses, several of which have delivered staggering returns. Ashtead, for instance, is up by nearly 19,000% since going public in 1993. Diploma‘s up almost 4,000% over the same period. Meanwhile, Games Workshop (LSE:GAW) has delivered an almost 8,000% return since 1994.
To put this into perspective, £10,000 invested equally across all three of these FTSE businesses then would now be worth just over £1m today. Needless to say, that’s a staggering return for such a relatively small sum of starting capital. So, the question now becomes which stocks are next in line to deliver millionaire-making returns over the next three decades?
Finding long-term winners
Earning such gargantuan returns doesn’t require investors to allocate their capital to the bleeding edge of technology stocks. While these companies have undoubtedly delivered in the last decade, they’re not the sole option for building significant wealth.
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Ashtead’s an equipment rental business. Games Workshop makes plastic miniatures. And Diploma provides support solutions to the industrial sector. None of these exactly scream high-growth opportunities. And yet they’ve become some of the best-performing shares in the UK by successfully unlocking the hidden value of their target markets.
So when hunting for future winners, we’re actually looking for businesses that have a lot of hidden value with the know-how to unlock it.
Analysing Games Workshop
Let’s take a look at how Games Workshop grew itself into a multi-billion-pound enterprise. The company created one of the most valuable brands within the tabletop gaming industry – Warhammer. Its sci-fi variant, Warhammer 40,000, has grown even more popular than the original fantasy-based world. And it’s now one the biggest tabletop wargames in the world with millions of players.
However, the success of Games Workshop wasn’t linked solely to the games it created. Instead, the company created an entire ecosystem that provides appeal to a far wider range of audiences that keep them coming back for more.
Plastic miniatures continue to be a primary source of income for the business. But it’s supplemented by books, paints, hobby tools, video game royalties, animations, and tutorials. It even has its own streaming service called Warhammer+ to house the firm’s vast library of content.
All of this culminated in a cult-like following from customers. The steadily rising popularity transformed into insane levels of pricing power, which now support operating profit margins of nearly 40%.
What are the best FTSE shares to buy now?
It’s impossible to know for certain which British stocks are on track to deliver 10x returns over the next couple of decades. But by studying previous winners, investors can narrow the scope of their search.
Games Workshop generated an impressive competitive moat that allowed it to dominate an industry with vast levels of competition. On the other hand, Ashtead saw a gap in the US market and expanded its business rapidly to capitalise on the opportunity. So the next millionaire-making FTSE share could be one attempting to do the same in their own target market. And it’s up to investors to hunt down such opportunities.
