Advantages of high priced shares?

Question

Advantages of high priced shares?

Answer 1

It fills the pockets of company executives when they exercise their stock options.

Answer 2

Share price by itself means very little until you get to the extremes.  There are very little clues to the quality of a company, or its future, in whether the current share price is $25 or $250, if the share price is all you look at.  However, at the extremes of high and low, there are clues to the nature of the company and more particularly the nature of the investor.

Penny stocks, for example, are mostly a loser's game and are subject to spammers and scammers.  Extremely high prices, like Berkshire Hathaway (BRK-A), have the interesting effect of discouraging short-term speculators in favor of long-term investors, and discouraging shorts.

Answer 3

Knowing a stock has a high price doesn't help you. Now if the stock is priced high because it is in an uptrend that could be bullish. At the same time a $5 stock in an uptrend is also bullish. The price doesn'tmatter as much as the price patterns.

Answer 4

see in market there are some shares always making news irrespective of the market condition. The advantage of high price is simple there will be high fluctuation since you can book profits too......................and some times you loose too i will give you some example :

1. see the movement of JINDAL STEEL , MRF, ABAN, MMTC(BSE)etc

2. Those which are in cash market only they hav freez limit isn't it? But when they enter F&O  definitely there is movement. Few days back NSE declared the F&O list immediately they tookm movement

If you have more doubt i can clarify it ok

Answer 5

On its own, none.

Answer 6

It sort of depends on exactly what you mean by "high priced" as Clinton might say.  High priced as in trading at a high absolute price or high priced as in having a high price relative to the earnings of the company.

In the second case the disadvantages far outweigh the advantages in my opinion, an example illustrating the point being Crocs.  Last year the stock was selling above 70 a share and at a PE ratio above 35.  Now look at it.  $4 a share.  

In the first case, high priced shares tend to be less volitile than lower priced shares assuming that they are not trading at a high price because there are a bunch of speculators driving the price up.  That is that the PE ratio is not out of line with the fundamentals of the company.