When it comes to investment options, equities are among the most preferred by investors. Putting your money in stocks of reputed companies can fetch good returns over the medium to long term. Of course, it is imperative that you diversify your portfolio and avoid putting all your eggs in the same basket.
When talking about stocks, their price per unit is a major factor that determines investor decisions. While most stocks are within reach of retail investors, there are the ones that are highly priced. For your knowledge, here’s a look at some of the most expensive stock prices of all time. It is to note that high price of a stock is not necessarily indicative of its quality.
Seaboard Corporation (SEB) – Kansas based Seaboard Corporation (SEB) was founded in 1918. A multinational company, Seaboard focuses on agribusiness and transportation. It has presence in several industrial segments. In the United States, the company’s operations include ocean transportation and pork production and processing. Seaboard’s stock prices reached an all-time high of $4,699 in April 2019.
NVR, Inc. – One of the largest home construction companies in the US, NVR, Inc. began operations in 1980. It has presence in several states and focuses on the East Coast region. Apart from building and selling homes, the company also operates other businesses such as title services and mortgage banking. It owns and operates various brands such as NVHomes, Ryan Homes and Heartland Homes. NVR, Inc. stock prices zoomed to an all-time high in mid-2021 at $5,308.
NEXT PLC – Headquartered in England, NEXT PLC is one of the leading retailers of clothing, home products and footwear. The company was founded in 1864 by Joseph Hep worth. Apart from United Kingdom, the company has stores across Europe, Middle East and Asia. In the clothes segment, Next Plc is currently the largest retailer in the UK. Next Plc stock prices hit an all-time high in September 2021 at $8,484.
Chocoladefabriken Lindt & Sprüngli AG – A Swiss chocolatier and confectionery company, Lindt was founded in 1845. It is currently headquartered in Kilchberg, Switzerland. The company has production facilities in several European countries and in the United States as well. Lindt stock prices reached their peak in November 2021, at $118,400.
Berkshire Hathaway – Based in Omaha, Nebraska, United States, Berkshire Hathaway is an American multinational conglomerate holding company. The company was founded in 1839 by Oliver Chace. Berkshire Hathaway owns several companies and has minority stake in companies like American Express, Bank of America, Apple, Coca Cola and Kraft Heinz Company. Berkshire Hathaway stock is currently the most expensive in the world. It had registered it peak of $538,949 in March 2022.
MOST EXPENSIVE SHARES OF ALL TIME
So, what are the most expensive shares, according to you? Well, it’s Berkshire Hathaway (BRK.A). Before the coronavirus pandemic market downturn, this A-class share traded for more than $300,000. It hit an all-time high of $347,000 per share in early 2020 before closing at $240,000 on March 23, 2020 right when the coronavirus spread hit the stock market.
Warren Buffet, chairman and CEO of Berkshire Hathaway happens to be the chairman and CEO of Berkshire Hathaway. It is an American multinational conglomerate holding company, headquartered in Omaha, United States of America. It owns more than 60 different companies across diverse sectors and owns significant stakes in as much as 20 other companies.
What are the other ‘most expensive shares?’ There were two other stocks with share prices above $100,000 as of March 23, 2020. For Pendrell Corp. Class A, from Specialty Business Services, the closing price was $153,000 per share. Then there was Bactolac Pharmaceutical, in the packaged foods space, the closing price was $120,000 per share.
The above shares were in the order of price per stock. If you want to to know which company’s stock is considered highest in value, then Amazon Inc tops the list as the most valuable company. Financial services entities around the world compiled this list. Certain stocks are priced high as the company may have never completed a stock split.
Market Value
Market value or market capitalization is needed to understand the relative size of a company compared to others. Market cap measures what a company is worth in the open market, as well as the market’s perception of its prospects.
Market capitalization is used to establish rational expectations over a given stock. It is used to formulate a solid portfolio investment strategy. Large caps are companies with a market cap of over $10 billion. Mid-cap companies typically range from $2 billion to $10 billion. Small-cap companies clock in at under $2 billion in market capitalization.
Large-cap companies tend to have low but steady share price growth. Small-cap companies offer a higher return, at higher risk. The latter group of companies usually don’t pay dividends.
Microsoft is considered the largest US-listed stock with the highest market cap. Berkshire Hathaway ranks as the 10th largest stock with a market cap of about $391.9 billion. These players are followed by companies such as Apple Inc., Amazon.com, Alphabet Inc, Alibaba group LTD Holding ADR, Facebook and Johnson & Johnson, ExxonMobil.
Asset Classes
Market capitalization has an impact on asset classes or categories into which stocks are grouped. In turn, this has an impact on mutual funds and ETFs. This capitalization also has an effect on the ownership of individual stocks by institutional investors.
Domestic large-cap stocks usually comprise of 70% of US stocks by market value. These stocks have a market cap above $8 billion. Similarly, domestic mid-cap stocks generally consist of 20% of US stocks by market cap. The range of market capitalization, in this case, is typically between $1 billion to $8 billion. Domestic small caps are in the bottom 10% of US market capitalization.
Large-cap stocks, also called blue-chip stocks, usually have strong credibility, strong market recognition, productivity and financial stability. Hence, these stocks are considered to be very lucrative. Large-cap stocks are well established and have attained financial understanding. Thus their share value does not appreciate as much as mid-cap or low-cap stocks. They tend to give moderate returns. Returns on such stocks are derived from the dividend component.
Large-cap stocks have a robust financial infrastructure in place. Naturally, they react less to market volatility. Investment risk is less in the case of large-cap stocks. Unlike mid-cap
and small-cap stocks, large caps do not run the risk of dissolution during market contraction.
Also, due to its long history, large-cap stocks tend to be trusted more by potential investors. These stocks tend to be more expensive than others. They are the most liquid investment option in the market due to their immense popularity and high demand from buyers. These stocks are also, in most cases, most expensive than other investment options.
Some alternatives to large-cap stocks are mid-cap stocks. These companies have grown from a startup stage into a more developed business, usually with multiple business units or product lines. Mid-cap stocks are less volatile, and they tend to give regular returns. Mid-cap companies show immense potential for capital appreciation.
Small caps are smaller companies, often at the startup stage. They mostly tend to have only one product or service line, and they may not be well-capitalised. While these stocks often give high returns to the investors, they also carry more considerable risks.
Impact on mutual funds and ETFs
A lot of stock market benchmarks are market cap-weighted. These indices are populated with a cluster of stocks weighted by their relative market cap. Also, top holdings based on the market cap will have an undue influence on the performance of the ETF.
Conclusion
Over the decades, how businesses are viewed and reported has changed. Even the criteria in which companies are listed has transitioned based on intrinsic value and reputation. The fortunes of many companies are linked with market value. The market value represents expectations. Apple Inc. has been considered a valuable company for a very long time. Amazon comes a close second. While another company’s market cap might exceed Apple’s, it’s unlikely that another company’s stock price will exceed that of Berkshire Hathaway.
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