This ownership is represented not by a stock’s share price but rather by its fundamental valuation metrics, such as P/E, price-to-sales and price-to-free cash flow ratios. For example, a company with 1 million shares of stock worth $1,000 each may choose to implement a 2-for-1 split that would double its share count to 2 million and decrease its share price to $500. Different companies have widely different share structures, even if they have similar market caps. For example, Bank of America and Eli Lilly have similar market caps of around $300 billion—but Bank of America has more than 8.1 billion outstanding shares while Eli Lilly has only 950 million. White Mountains is an excellent example of how a company with a relatively small business can still have a high share price. However, the dollar price of a stock doesn’t tell you much about a company’s underlying value.
Texas Pacific Land Corporation (TPL)
Berkshire Hathaway never split its Class A shares because it wanted to keep value without increasing volatility, resulting in a share price that is well over $400,000. In fact, many companies purposely keep their stocks within certain ranges, often $20 to $120 per share. They’ll strategically use a stock split to keep their stock at a lower price and to make it easier for investors to buy some shares, meaning they’ll need fewer dollars to invest. But if a company doesn’t split its stock, over the long-term, prices should i invest in ethereum or bitcoin as a college student can rise to extraordinary heights. The holding company, led by billionaire and legendary investor Warren Buffet, reported an operating profit of $10 billion for the second quarter of 2023, an all-time high. At nearly half a million dollars per share, Berkshire Hathaway remains the most expensive stock by share price.
To help companies scale up and achieve their visions, MicroStrategy harnesses artificial intelligence, otherwise known as AI. Perhaps the most surprising thing from history is that the previous most valuable stocks outperformed the S&P 500 for the next five years after they reached the top. On Sept. 15, 1998, Microsoft passed General Electric to become the most valuable stock for the first time.
- For example, Bank of America and Eli Lilly have similar market caps of around $300 billion—but Bank of America has more than 8.1 billion outstanding shares while Eli Lilly has only 950 million.
- Google generates revenue through advertising, publishing tools, and the Android operating system.
- Determining whether a stock is cheap or expensive is about comparing price to intrinsic value, or what the company is worth.
- My discomfort with the valuation aside, I can’t deny that history says Nvidia stock hasn’t peaked yet.
White Mountains Insurance Group Ltd. (WTM)
Booking Holdings (BKNG) owns the travel reservation sites Booking.com and Priceline—two of the biggest players in the online travel industry. The company closed at an all-time high of $4,014.38 on June 25, 2024. The company’s stock reached a closing high of $3,515.29 in November 2021.
Berkshire Hathaway is far from the only stock that has risen to a high share price. These are the most expensive stock shares as measured by the closing share price on Aug. 2. However, some become drawn to a company’s shares merely because of the quoted price. One stock has become so expensive that a single share is worth more than a house in many parts of the country. Although it might be hard to comprehend how a share could carry such value, a stock’s price may not represent the value of a company as well as some might assume. Many investors measure a share’s cost by the stock’s price relative to its earnings or sales.
Seaboard shares have lagged the S&P 500 over the past decade, but its business and geographical diversification help mitigate investment risk. Chipotle sells burritos, tacos, burrito bowls, quesadillas and beverages, and its brand is focused on high-quality ingredients, competitive prices, convenience and speed of service. AutoZone is an auto parts and accessories retailer that operates more than 6,500 stores in the U.S., Mexico and Brazil. The company has a growing commercial customer base, but it still derives about 70% of its U.S. sales from do-it-yourself shoppers.
Is the Price of a Company’s Stocks Indicative of That Company’s Value?
The Federal Reserve’s emergency interest rate cuts in 2020 triggered a boom in the U.S. housing market, but the Fed has now been raising interest rates for the past year to combat inflation. As a result, mortgage rates have spiked and the housing market has cooled, weighing on NVR’s orders and growth outlook. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Nvidia is benefiting from the surging adoption of artificial intelligence (AI). This means that business could stay good for Nvidia, leading to more market-beating gains.
Investing In Expensive Stocks
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. Below are 10 of the most expensive stocks — those with the highest share prices — that investors can buy and why a stock price actually doesn’t tell you much at all. The company also has a large investment portfolio with stocks in major companies such as Apple (AAPL), Bank of America (BAC), and United Parcel Service (UPS).
As of this writing, Nvidia stock is up more than 200% in the past year and is now worth over $3.3 trillion. It’s important to remember that while a high share price might result from significant growth in the past, it’s not always a reliable indicator of the how to buy and sell stocks on your own best stock to buy for the future. Some of its well-known brands include Geico, Dairy Queen, Oriental Trading Company, Duracell and Fruit of the Loom. Stock tracking and financial websites like TradingView provide historical data for most stocks. Some allow users to submit queries for specific price ranges, maximums, and minimums. The company created a new class of shares under the ticker symbol BRK.B in 1996.
The company provides a sales program that offers commercial credit and delivery of parts and other products and sells automotive diagnostic and repair software under the ALLDATA brand. The company launched a new share class in 1996 (BRK.B), which has a lower price. This allows people to purchase much smaller chunks of the company. A higher P/E ratio signals that investors are paying more for the company’s earnings, while a lower one indicates that they’re not as willing to pay as much. Texas Pacific Land Corporation is a landowner in the state of Texas and generates revenue through oil and gas development, water services, oil and gas royalty interests, and more.
Headquartered in Tennessee, the company also offers ALLDATA, which sells automotive diagnostic and repair software. Autozone has more than 6,100 stores across the U.S., 706 stores in Mexico, and 76 stores in Brazil. “The value that should matter to an investor is the price-to-earnings ratio (P/E ratio) or eve t saltman sells 10,000 shares of gopro, inc. even more importantly, the forward P/E,” Milan says. NVR is one of the largest U.S. homebuilders, primarily focusing on single-family detached home construction. In its 30-year history, White Mountains has owned and operated property and casualty insurers, life insurers, financial guarantors, brokerages, reinsurers, service companies and investment advisors. MicroStrategy is a software solutions company that operates online through an app, online sales or the cloud.
In addition to offering traditional banking services—such as checking, saving and money market accounts—First Citizens also provides consumer loans and wealth management services. Once a company initially becomes the most valuable, history shows the stock price usually hasn’t peaked yet. From there, the oil company’s stock would rise another 60% over the next couple of years and 75% over the following decade. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
As you can see in the list above, a stock can be any price, but the company’s size – as measured by market capitalization – can be anything. A stock price alone doesn’t even tell you how expensive a stock is. Berkshire Hathaway offers the granddaddy of stock prices run by the granddaddy of investors, the legendary Warren Buffett. This conglomerate owns stakes in a number of businesses, including insurance, railroads and utilities. If you don’t have more than a half-million dollars to buy an A share, you can still pick up B shares at a much lower price. In reality, what matters is a company’s underlying value, which is more accurately represented by its market capitalization.
One of the primary reasons is that there are so few shares available. The fewer outstanding shares that a company has indicates a higher stock price while the reverse is true for those with lower share prices—that there are more outstanding shares. You can calculate a company’s stock price by dividing its market cap by the total number of outstanding shares. So a company’s earnings per share shows you how much you’re getting for the stock price you’re paying.