As stocks soar on Wall Street, more join $100 Club
Associated Press
NEW YORK
High prices help sell watches, sports cars and handbags by suggesting rare quality. Now, they may be helping sell stocks, too.
The number of stocks priced at $100 or more is at a multidecade high. Companies worried that sticker shock would keep small investors from buying used to split their shares in two or more to lower the price. But now splits are scarce, and a triple-digit stock has cachet.
“It shows investors have confidence in you,” says Jon Johnson, editor of Stocksplits.net, an investing newsletter. “It’s another thing you can point to and say, “We’re doing fine in uncertain times.”
Jeffrey Hirsch, editor of the Stock Trader’s Almanac, calls it a new “badge of achievement.”
Among stocks in the Standard & Poor’s 500 index, 42 trade for $100 or more, according to Howard Silverblatt of S&P Dow Jones Indices, which manages the index. That is the highest in his records, which date back 36 years.
A surging stock market has helped lift the price of stocks, as has inflation over the years. But experts suggest a bigger reason is that more companies are refusing to cut prices with splits that swaps a single share for multiple shares. A two-for-one split cuts a $100 share into two $50 shares.
Among members of the S&P’s $100 Club, the highest price belongs to Google, at $682. Apple is in second place at $610. The rest come from a broad range of industries, from railroads (Union Pacific) to gambling (Wynn Resorts) to restaurants (Chipotle Mexican Grill) and oil (Chevron).
The biggest gainer among new members is Sherwin-Williams, the paint maker. Its stock has risen 69 percent since the start of 2012 on higher revenue and earnings. It closed Friday at $151.
For those coveting really high-priced stocks, the prize remains Class A shares of Berkshire Hathaway, which aren’t in the S&P 500 and have never split. They are worth $133,841 each.