There are some low-priced stocks out there that really catch Wall Street’s fancy. There’s some kind of love affair with a cheap stock — with investors fooling themselves into thinking that it’s easier for a $1 stock to get to $2 than it is for a $100 stock to get to $200.
But the bottom line is still the bottom line. A stock succeeds or fails on the merit of its business, not logistical nonsense like shares outstanding or the headline value of stock.
Take the 50-to-1 stock split that Berkshire Hathaway (NYSE:BRK.B) executed in 2009 to bring its “Baby B” stock down from more than $3,000 a pop to a manageable amount under $100 per share. Did it change the company? Did Warren Buffett become any smarter or dumber as a result?
And on a more basic level, you make the same amount of money owning one share of a $3,000 stock as you do with 3,000 shares of a $1 stock. Either way, you have the same amount of money invested — it’s just divided up differently.
So if you’re afraid of high-priced stocks or in love with bargain picks, take a moment to consider these five stocks with $200-plus price tags — and the potential to move even higher in the months ahead:
Intuitive Surgical (NASDAQ:ISRG) makes the innovative da Vinci surgical systems that have revolutionized operations used to treat cancer and heart disease, among other things. Without getting too technical, Intuitive Surgical gear allows doctors to operate on a patient with fewer incisions, speeding up recovery time and reducing the risk of complications. ISRG is up 400% in five years — taking the recession in stride thanks to powerful growth as its technology has caught on and as aging baby boomers create increased demand for surgeries. The company has seen nine straight quarters of year-over-year profit increases and has seen a streak of revenue increases even longer than that. Health care is one of the few growth areas in the American economy, and ISRG is well positioned to capitalize on this trend.
Apple (NASDAQ:AAPL) is the $400 gorilla of Wall Street that dares you to bet against it. Yeah, shares dropped 15% from October to November — but Apple has bounced back in a big way, hitting an all-time high Wednesday, and seems ready to move even higher. The iPad 3 could come as recently as February, if you believe the rumors, and Apple clearly is looking to maintain its stranglehold on the tablet market. Wall Street is admittedly ga-ga for Apple, so you have to beware of the hype. Still, a forward price-to-earnings ratio of less than 11 hints that there still is time to buy Apple for the continued march upward.