by Marc Bastow | September 20, 2012 1:40 pm
Tuesday’s market close marked a time to roll out the welcome mat to an exceptional company that just manged to join an exceptional, and very exclusive, club on Wall Street.
Apple (NASDAQ:AAPL) finished at over $700 per share, continuing its extraordinary run (up 450% in five years). In doing so, Apple joins just four other companies at that share price level.
Who are the other members of this club?
Of course, there’s Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A). Make no mistake about it: Berkshire has its own room on another floor entirely. BRK.A represents the voting shares at Berkshire, the stock has never split, and it has never paid a dividend.
It’s also a holding company heavily invested in blue-blood stocks like Coca-Cola (NYSE:KO), IBM (NYSE:IBM), American Express (NYSE:AXP) and Wal-Mart (NYSE:WMT), just to mention a few.
Oh, and it’s priced at $133,520 per share. The rest of us can access Berkshire through the BRK.B shares, priced at $89.20. So BRK.A, although technically a member of the $700 club, is what I like to call a statistical outlier, also known as “very, very few people can afford to buy those shares.”
How about some realistic $700 club players? We can always start with the latest entrant, Apple, which appears to have no end in sight beyond the recent $700 threshold. Whatever can go right for the company is doing so, from the recent introduction to the wildly popular iPhone 5, to its next versions of iPads scheduled for release before year-end, to gobs of cash, a wicked $2.65 per share dividend and … you get the idea.
It feels safe to say at least for the near term that Apple is in this club to stay.
Flying a little bit under the radar is Google (NASDAQ:GOOG), which at one time was in the club, saw its shares dip into the high $400s, and has worked its way back in with a recent price at just under $725.
Much like it’s California neighbor, Google is also hitting on all cylinders. InvestorPlace IPO Playbook Editor Tom Taulli loves these guys and doesn’t want you to forget that Google commands a 60% share of the search market. Add in its clout in the cloud, YouTube success, $4.3 billion in cash flow and continued success of its Android mobile operating system, and it seems like Google might not see a price under the magic $700 mark for some time to come. For investors, GOOG could still be a very strong long-term investment.
Here’s a name that you might be familiar with but never thought of as a $700 club member: NVR Homes (NYSE:NVR), which trades at over $800.
The Reston, Va.-based group builds single-family detached homes, townhomes and condominiums, and it operates a mortgage banking and titling service to boot. The company has almost miraculously avoided the long-term slump of competitors like Toll Brothers (NYSE:TOL), Lennar (NYSE:LEN) and M/I Homes (NYSE:MHO). NVR stock has actually gained 77% over the last five years!
Perhaps because it’s somewhat thinly traded, with just over 40,000 shares on average changing hands each day, it gets to fly low and avoid much scrutiny. But only 5% of the shares are owned by insiders, so someone out there in institutional land likes them quite a bit, despite no dividend. Of course, the share appreciation can make up for a lot of dividends withheld.
Still, I’m not so sure I’d want to own this one, as any one day’s spike could be difficult to handle.
Our last $700 member is even more of a surprise, a name most investors have likely never heard of: Seaboard (NYSE:SEB), which trades on the American Stock Exchange.
Here’s what you don’t know: First, Seaboard trades at over $2,200 per share, and every once in a while — the last time being 2010 — it doles out a fairly hefty dividend ($6 per share last time).
Here’s more: The company is 90 years old, having started as a flour producer in Atchison, Kan., in 1918. It went public in 1959, and today is an international agribusiness and transportation giant, with just over $5 billion in revenues.
It operates mills and processing and production facilities around the world, and it owns nearly 40 vessels and over 50,000 dry, refrigerated, specialized containers and related equipment.
Seaboard is also almost the opposite of NVR in that 78% of the shares are held by insiders, leading to an even smaller daily trading average. Which is a shame because if the stock ever got down to the entry price for the $700 club, it would be well worth a long look.
I’m not sure who might make the exclusive list over the next year or so, but we’ll be sure to check back in when it comes knocking.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he is long AAPL.
Source URL: http://investorplace.com/2012/09/wall-streets-own-700-club-is-very-exclusive-brk-a-brk-b-aapl-goog-nvr-aex/
Short URL: http://investorplace.com/?p=233745
Copyright ©2013 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.