Top 6 Expensive Stocks Worth Watching in 2024
What Makes These Six Stocks Trade Above $1,000?
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I consider a high-priced stock, or an expensive stock, to be one that typically trades at around or more than $1,000. I’m particularly drawn to these high-priced stocks, as they can be perceived as a symbol of a company’s success.
Many such stocks have been outstanding performers over recent years.
However, the dollar price of a stock doesn’t reflect its underlying value, as it is more influenced by the company’s ownership structure than its business fundamentals. High share prices might discourage investors who feel there’s limited upside or who cannot afford to buy a single share.
In this article, I explain some key fundamental concepts of investing and highlight six public companies with the highest share prices on major U.S. stock exchanges, providing a comprehensive analysis of each and offering valuable insights for potential investors.
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Key Fundamentals in Investing
Share Price vs. True Value
The historic saying that price is what you pay and value is what you get is relevant to the stock market.
According to Daniel Milan, managing partner and investment advisor representative at Cornerstone Financial Services, you should ignore a stock’s share price and instead focus on its price-to-earnings ratio (P/E ratio) or other fundamental valuation metrics when looking for value in the market.
"The value that should matter to you as an investor is the price-to-earnings ratio (P/E ratio) or, even more importantly, the forward P/E," Milan explains. "A low P/E ratio is a better gauge for determining if you are receiving an attractive amount of value for what you are purchasing."
Share Price: This is the current price at which a single share of a company's stock is traded on the market. It's determined by supply and demand dynamics and can fluctuate frequently.
Value: This refers to the intrinsic worth, or fair value, of a company, often assessed through various metrics like earnings, revenue, growth prospects, and assets. It indicates what the company's stock should be worth based on its fundamentals.
Stock Splits & High-Priced Stocks
The list of most expensive stocks in the market mostly represents successful companies that have chosen not to implement stock splits.
A stock split increases a company’s total number of shares outstanding by a specific multiple and decreases its share price by that same multiple.
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.
It’s important for investors to understand that stock splits don’t inherently create any value for investors. In the case of the hypothetical stock split described above, the company’s market cap would be $1 billion both before and after the stock split.
Should You Buy Expensive Stocks?
The only difference between stocks with high and low share prices is their share structure. A stock with a high share price can have just as much long-term potential as one with a low price.
Dr. Robert Johnson, a CFA and finance professor at Creighton University, says that a company’s stock price should be irrelevant to you as an investor.
What matters is the ownership the share gives you, meaning how much of the company and its earning power you own. This ownership is represented by fundamental valuation metrics like the P/E ratio, price-to-sales ratio, and price-to-free cash flow ratio, not the stock’s share price.
Top 6 Expensive Stocks Worth Watching in 2024
In this article, we dig into into six of the most expensive stocks currently traded on major U.S. stock exchanges.
These stocks include MicroStrategy (MSTR), ASML Holding (ASML), MercadoLibre (MELI), Seaboard Corporation (SEB), Booking Holdings (BKNG), and Texas Pacific Land Trust (TPL).
We'll analyze who these companies are, what services they provide, their leadership status in their respective sectors, the reasons behind their high stock prices, and whether investors should consider adding them to their portfolios.
Additionally, you'll identify which of these stocks are dividend payers, discuss their historical performance, future outlook, and provide a comparative analysis.
1. MicroStrategy (MSTR)
MicroStrategy, Inc (MSTR) is a business intelligence company that provides enterprise analytics and mobility software. Recently, it has gained significant attention for its large investments in Bitcoin (BTC). While not the largest in its sector, MSTR MSTR 0.00%↑ is well-respected for its advanced analytics solutions.
The stock price is high due to significant BTC holdings, strong enterprise software offerings, and the market perception of its leadership in business intelligence. However, it does not pay dividends.
Historically, MSTR has experienced significant volatility, partly due to its BTC holdings, which can be both a risk and an opportunity depending on market conditions. Future performance will depend heavily on BTC b and the company's ability to grow its software business.
Compared to other business intelligence firms like Tableau (owned by Salesforce (CRM) and Qlik, MSTR’s focus on BTC adds a unique risk and potential reward dimension. Investors should weigh the company's software performance and Bitcoin investment strategy before investing.
2. ASML Holding (ASML)
ASML Holding (ASML) is a Dutch company that supplies photolithography machines to the semiconductor industry. These machines are crucial for manufacturing chips, and ASML is a dominant player in the semiconductor equipment sector, with cutting-edge technology critical to chip production.
The high stock price is attributed to its monopoly-like status in the EUV (Extreme Ultraviolet) lithography market, increasing demand for semiconductors, and consistent innovation and technological advancements.
ASML ASML 0.00%↑ pays a dividend, making it a strong candidate for long-term investment given its essential role in the semiconductor supply chain. ASML has shown consistent growth in stock price over the years, driven by its technological leadership and the growing demand for advanced semiconductors.
The ongoing demand for advanced chips in technologies like AI, 5G, and autonomous vehicles bodes well for ASML’s future growth. Compared to competitors like Applied Materials and Lam Research, ASML’s monopoly in EUV technology gives it a significant competitive edge.
3. MercadoLibre Inc. (MELI)
MercadoLibre Inc. (MELI) is an Argentine company that operates online marketplaces and payments systems across Latin America. It is the leading e-commerce platform in the region, often compared to Amazon (AMZN).
The stock price is high due to its dominant market position in a high-growth region, diversified services including e-commerce, fintech, and logistics, and strong revenue growth and market expansion. MELI does not pay dividends.
MELI MELI 0.00%↑ has shown impressive growth, mirroring the expansion of e-commerce and digital payments in Latin America. Despite economic volatility in its operating regions, MELI is expected to continue expanding its market presence, especially in fintech with its Mercado Pago platform.
Compared to other e-commerce giants like Amazon (AMZN) and Alibaba (BABA), MELI’s focus on the Latin American market gives it a unique growth trajectory. Investors should consider its leading market position and growth potential in Latin America.
4. Seaboard Corporation (SEB)
Seaboard Corporation (SEB) is a diversified conglomerate with interests in agribusiness, shipping, and energy. While not a household name, SEB is significant in niche markets like pork production and marine transportation.
The high stock price results from diversified business operations, strong financial performance across sectors, and a limited number of shares outstanding.
SEB SEB 0.00%↑ pays a dividend, and investors may find it attractive due to its diversification and stable performance in multiple industries. SEB has shown stable performance, benefiting from its diversified business operations and strong financial health.
SEB’s diversified operations position it well to weather economic fluctuations and capitalize on opportunities in agribusiness and shipping. Compared to other conglomerates like Cargill and Archer Daniels Midland, SEB’s smaller size and niche focus can offer more stability and targeted growth.
5. Booking Holdings Inc. (BKNG)
Booking Holdings Inc. (BKNG) operates several travel fare aggregator websites and travel metasearch engines, including Booking.com, Priceline, and Kayak. It is a leading player in the online travel booking sector.
The stock price is high due to its dominant market position in travel booking, high profit margins, strong brand recognition, and recovery potential post-pandemic; however, BKNG BKNG 0.00%↑ doesn’t pay dividends.
The stock has experienced significant growth, driven by the increasing adoption of online travel booking and its recovery potential post-pandemic.
The ongoing recovery in global travel presents significant growth opportunities for BKNG. Compared to Expedia (EXPE) and TripAdvisor (TRIP), BKNG’s extensive brand portfolio and market share provide it with a competitive advantage. Given the strong recovery in travel, BKNG presents a compelling investment opportunity.
6. Texas Pacific Land Trust (TPL)
Texas Pacific Land Trust (TPL) is one of the largest landowners in Texas, with significant holdings in oil-rich regions. TPL plays a unique role due to its extensive land ownership and mineral rights.
The stock price is high due to large land holdings in valuable oil regions, revenue from oil and gas leases, and limited share availability.
TPL TPL 0.00%↑ pays a dividend. The company has shown strong performance, reflecting the value of its land holdings and revenue from oil and gas leases. TPL’s strategic management of its land resources and ongoing exploration activities ensure it remains a valuable asset in the energy sector.
Compared to other land trusts and energy companies, TPL’s unique focus on land ownership and mineral rights provides a distinct investment proposition. The scarcity of shares and valuable land assets make TPL a potentially lucrative investment.
GP’s Wrap Up
Investing in expensive stocks like MSTR, ASML, MELI, SEB, BKNG, and TPL requires careful consideration of their market positions, financial health, and future growth potential.
While their high prices reflect strong market confidence, you always should perform thorough due diligence to determine if these stocks align with your investment goals and risk tolerance.
Additionally, understanding which of these stocks pay dividends can help inform investment decisions based on income generation needs. The historical performance, future outlook, and unique challenges of each company should also be factored into the investment decision.
Other expensive stocks include MTD, AZO, NVR, CABO, WTM, MKL, BRK.A, and companies that recently did stock splits NVDA and CMG.
Keep these stocks on your radar. Create a chart list and track them daily. Always follow the Money Flow rules.
“Do all the work you can do, every day, and do each piece of work in a perfectly successful manner; put the power of success, and the purpose to get rich, into everything that you do.” - Wallace Wattles, The Science of Getting Rich
Always remember, whatever you think about comes about, whatever you focus on grows. - GP
Looking for a group of likeminded people to trade with? Text alerts and the MFGDiscord. Text GP 1-936-661-7786 or email GP fullauto11@gmail.com to join.
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