Royalty, Prominence and Affluence is mostly judged through first impressions in today’s society. However, the true mark of opulence should actually be judged by what one holds in their stock portfolio. Find out which are the five most expensive stocks on the NYSE and NASDAQ. Owning these implies royalty irrespective of what you wear, how you look, where you live or what you drive.
An eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan has over the past century become a metonym for the financial markets of the United States as a whole. Home to the New York Stock Exchange (NYSE), the world’s largest stock exchange by market capitalization of its listed companies and the NASDAQ it is famously known as WALL STREET. Its location in New York City has made the city rank as being the top economically powerful cities in the world with London being the only other close competitor.
The NYSE and NASDAQ rank one and two by value of capitalization of their listed companies and have more than 5000 listings between them. They constitute the two primary securities markets in the United States and while both share similarities they also share many differences in terms of their services and method of operation. The fundamental difference between the NASDAQ and NYSE lies in the method in which each does business.
The NYSE constitutes an auction-style securities market in which brokers purchase stocks on behalf of firms or clients. Purchasing at the NYSE takes place in person on the floor of the exchange itself. The NASDAQ constitutes a dealer-based securities market. Dealers sell stocks directly to investors or firms through over the telephone or, more commonly, via the Internet. Trading on the NASDAQ takes place electronically, unlike NYSE trading, which takes place in person.
The NYSE is also a battlefield for the grown-ups as not all companies are eligible to trade here. To publicly trade stocks through the exchange companies must possess at least 2200 shareholders, trade 100,000 shares monthly, possess a market capitalization of $100 million and generate $75 million in revenue annually as of the time of publication. The NASDAQ on the other hand is a place where moderately successful start ups can go public. Because of the large number of technology firms traded on the NASDAQ, many think of the market as the primary indicator for trends in the technology industry. To trade on anyone of these exchanges you will require American trading accounts and also forex trading accounts if you are based outside the US.
Given the key differences between the NYSE and NASDAQ one would imagine that the most expensive stocks on the market judged on the basis of absolute price would belong to the former given its structure to work with the big brands. However, in recent times some of the well-known technology players have also risen to the top of the list of most expensive stocks given their market dominance and extra ordinary innovation.
Finance pros and stock market experts will argue that absolute price is not the right way to determine the list of most expensive stocks. While this is correct it is also true that the human mind seeks simplicity so we couldn’t help compiling this list on the basis on absolute price. Here’s a look at five of the most expensive stocks trading on the NYSE and NASDAQ.
5. Priceline.com Incorporated (PCLN) (NASDAQ)
At number five on the list of the most expensive stocks is Connecticut based discount travel and hotel booking site Priceline. One of the earliest travel booking engines on the internet, Priceline today owns a number of well known brands such as Agoda, Booking.com and Kayak.
Priceline is a stock that has greatly benefited those who have stuck with it over the long term. Its price has risen by more than 100 times since its lowest value of $6 which was observed in October 2002. Blinding growth outside the U.S., with fat margins to boot, is one of the reasons for this. It also has deals with more hotels than other providers.
4. Google Inc (GOOG) (NASDAQ)
At the number four spot is a company that needs no introduction to even a four year old child. Google’s stock has seen a strong run over the past year as it has risen 30% from $600 in February 2012 to approximately $800 at present. Its rise to one of the most expensive stocks on the NASDAQ is in part due to the change in investor sentiment regarding Google’s mobile monetization capabilities. The company has shown that it can successfully monetize its mobile user base as it has increased annual mobile run-rate to approximately $8 billion in Q3 2012 versus $2.5 billion in 2011.
In addition to the improvement in mobile monetization, Google’s international growth (54% of revenues were generated outside the United States in Q4 2012) has investors excited because its exposure to growing markets will ensure that it can grow its revenues going forward. The prediction is that the stock can touch $1000 in the near future if it continues its innovation streak and robust growth.
3. NVR Inc (NVR) (NYSE)
The third most expensive stock to own is NVR, Inc. a real estate development company in the United States. Its home-building unit sells and constructs new homes under the Ryan Homes, NVHomes, Rymarc Homes and Fox Ridge Homes trade names. It also has a Mortgage banking and Settlement services division which primarily serve NVR home-buyers.
NVR’s conservative approach post the sub-prime mortgage crisis is paying off now. Revenue and earnings bounced back last year, and the good times should continue. Analysts see revenue climbing 34% this year and another 18% come 2014. At close to $1,000, NVR would only be fetching 13 times next year’s projected profitability, and that’s a solid foundation to build on.
2. Seaboard Corp (SEB) (NYSE)
A diversified conglomerate based in Kansas, Seaboard Corporation is involved in the agriculture and ocean transport business around the world. In the U.S., most of its investments are concentrated on the production and processing of pork products. Internationally, it has interests in cargo shipping, commodity merchandising, sugar production, citrus and flour milling.
In December 2012, the company announced that it will pay the next four years of its dividends in 2012 so shareholders can benefit from the low tax rates on such income. No wonder, that the stock is a treasure to own.
1. Berkshire Hathaway A (BRK-A) (NYSE)
Finally, the most expensive stock not only on the NYSE but on any stock index is Berkshire Hathaway whose Class A share is close to $150,000. There are multiple reasons for such a mind-boggling share price, the foremost of which is that the Warren Buffet run firm is managed very well and investors treat Mr. Buffet as God when it comes to investment decisions and growing cash.
Berkshire Hathaway is the eight largest publicly owned company in the world. It has large amounts of capital at its disposal while maintaining a minimal amount of debt. Book value has increased by 20.3 percent per year since 1944. In the 10-year period from 2000 to 2010, while the market fell by more than 11 percent, Berkshire Hathawayâ€™s stock price rose by 76 percent.
Another reason why BRK-A is so expensive is that its stock is extremely rare to find as there aren’t a lot of them available on the market. The company also never chose to split its stock as Mr. Buffet only wanted knowledgeable investors who would look beyond the absolute value of the share to be a part of the company.
So there you have it, a list of the most expensive stocks on the American indices in terms of absolute price. In terms of market-cap however, Apple Inc is still the most valuable company in the world despite the sharp declines in its stock price recently followed by petroleum giant Exxon Mobil.