Stocks Over $100: Love 'Em or Hate 'Em? - Real Time Insight

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In stock investing, $100 a share used to be a magic number. Before electronic trading and low-priced Internet trades, $100 was usually as high as a stock would go before management decided to split the shares.

Why?

Before the 1990s when it cost $50 or $100 (or more) a transaction, individuals usually bought in blocks of 50 or 100 shares through their full cost broker. It therefore took a lot more money to buy 100 shares of a $100 company than 100 shares of a $25 or $50 company. Companies wanted to be attractive to all investors so they would split the shares to make sure that it was easy to buy.

The advent of low cost trading and the ability to buy even partial shares, however, has changed the game.

But even with the ease in trading, there is still a psychological component to the $100 share price. Stocks priced in the triple digits seem "expensive" to many investors, even if, fundamentally, the stock is trading at low valuations.

Heck, $5000 invested in Google, one of the highest priced stocks out there, gives you just 6.7 shares. Yet, the list of well known companies trading over $100 continues to grow. Some are certainly the high flying Internet stocks like Amazon and Google. Yet others are companies that have been around for a 100 years and which would have, in years past, most likely split their shares.

Here's just a few of the over $100 club:

Ralph Lauren (RL)
Chipotle (CMG)
Colgate Palmolive (CL)
Wynn Resorts (WYNN)
Panera Bread (PNRA)

Amazon.com (AMZN)
Costco (COST)
Priceline.com (PCLN)
PPG Industries (PPG)
Praxair (PX)

W.W. Grainger (GWW)
Sherwin Williams (SHW)
Apple (AAPL)
IBM (IBM)
Google (GOOG)

LinkedIn (LNKD)
Chevron (CVX)
Union Pacific (UNP)
Mastercard (MA)
Visa (V)

Despite the advances in making stock trading easier over the past 20 years, many investors still can't bring themselves to buy the higher priced stocks.

Are you an investor who just can't buy a stock over $100?

Or is share price irrelevant when you invest?

 


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: CL , CMG , PNRA , RL , WYNN

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