Why are some stocks so expensive
Highly priced shares are often out of reach of the common retail investors – hence usually companies try to keep the per share price low so that the stock is liquid and general market sentiments regarding the stock or the company can be tracked easily. However still, some stocks reach a price that is unaffordable for people from even middle income groups. This happens usually because of the following reasons –
- The demand for the share has increased – this happens usually for companies which have been traded in the stock market for a significant number of years.
- The company set the price initially that way as they wanted to target a particular income class.
That being said, shares that are the most expensive today may not be so forever. The markets go up and down, and companies rise and fall with changing times and business environments (or even regulatory frameworks).
Below is a list of the companies with the highest share price in the world.
| Name of the company | Market cap |
| Berkshire Hathaway | $690 billion |
| Lindt and Sprüngli AG | 23.78 billion CHF |
| NVR Inc. | $14.21 billion |
| Seaboard Corporation | $4.63 billion |
| Bookings Holding Inc | $76.99 billion |
| Madras Rubber Factory | Rs. 39,258 cr |
Berkshire Hathaway
This US-based multinational conglomerate holding company has the costliest share in the world, standing at $4,72,712.00 on 29th Nov, 2022.
Although known for its financial services, the firm also owns several other companies such as FlightSafety International, BNSF, Dairy Queen, NetJets, Fruit of the Loom, Helzberg Diamonds, GEICO etc. It also holds significant minority stakes in major companies such as Apple Inc., Wells Fargo, Coca Cola and American Express.
Lindt and Sprüngli AG
It is a famous Swiss confectionery and chocolate company. Its stock is currently valued at 99,800 CHF per share (CHF being the Swiss franc valued currently at roughly ₹86 per Swiss franc).
NVR Inc.
The company focuses on home construction and it operates under different brand names – Ryan Homes, NV Homes and Heartland Homes. Its area of operation is concentrated on the US east coast. The company’s current share price is $4444.98.
Seaboard Corporation
It is a major multinational agribusiness and transport company that focuses on pork production and ocean transportation. It also has operations in sugar and grain processing and electrical power generation. The company’s share is currently priced at $3989.98.
Booking Holdings Inc.
It is an American travel technology company that aggregates travel fares from various sources in order for its customers to book tickets etc. for their travels more easily and efficiently. Their revenues come primarily from commissions and advertising. Its stocks are currently priced at $1984.90 per share.
Madras Rubber Factory
It is a holding company focusing on the manufacturing of tires (across vehicle categories), tubes, flaps, rubber chemicals etc. It also offers paints and coats and other ancillary services. Its current share price is a whopping Rs. 92,326.55.
Final words
Now you must be having an idea about the world’s costliest shares. If you are interested in these stocks or want to find out more about stocks that have the potential to reach such a stage over time, try doing more research on the stock market on a trusted online platform. Once you feel confident, try to open demat account today!
Disclaimer: This article is written for educational purposes only. The securities quoted are only examples and not recommendations.
I've spent considerable time diving into financial markets and stocks, analyzing various companies, market trends, and investment strategies. When it comes to understanding why certain stocks are priced exorbitantly high, it often boils down to a multitude of factors intertwining with market dynamics.
Stock prices, especially high ones, aren't solely influenced by the inherent value of a company. They're shaped by market sentiments, demand-supply dynamics, company performance, and even the initial pricing strategy set by the company. A few factors contributing to steep stock prices:
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Demand Surge: Over time, established companies with a strong track record tend to attract more investors, driving up demand and subsequently the stock price.
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Perception and Brand: Companies like Berkshire Hathaway, with a diverse portfolio and an influential figure like Warren Buffett at the helm, often command higher stock prices due to their perceived stability and long-term growth potential.
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Pricing Strategy: Companies may strategically set higher prices at IPOs to target a specific investor class, leading to high initial share prices that might persist.
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Limited Supply: In some cases, a company might keep the number of outstanding shares low, elevating the stock price due to scarcity.
Each of the companies mentioned in that article showcases varying reasons for their high stock prices:
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Berkshire Hathaway: Its diversified portfolio, coupled with strategic investments, has attributed to its high per-share value.
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Lindt and Sprüngli AG: A well-known brand in the confectionery industry, maintaining a premium position in the market.
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NVR Inc., Seaboard Corporation, Booking Holdings Inc.: These companies operate in specialized industries, focusing on specific niches where their expertise commands a premium.
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Madras Rubber Factory: A combination of its stronghold in tire manufacturing, diversified offerings, and market perception has led to its steep stock price.
Understanding these companies’ operations, market positioning, and growth prospects can offer insights into why their stock prices are exceptionally high. However, it's essential to conduct thorough research beyond just stock prices to make informed investment decisions. Factors like financial performance, industry trends, and future potential should also be weighed.
Investing in stocks demands careful consideration, research, and sometimes expert advice. It's crucial to approach the stock market with a comprehensive understanding of risk and market volatility.
As always, it’s important to note that stock prices fluctuate and investing involves risks. Conducting due diligence and consulting with financial experts is advisable before making any investment decisions.
