Closing In On The $1,000 Psychological Barrier

The month of June welcomed Amazon.com, Inc. AMZN and Alphabet Inc GOOGL GOOG into the $1,000 club, ending Priceline Group Inc PCLN's long sojourn in the club of S&P companies whose stock prices have breached the $1,000 per share threshold.

Both stocks retraced their upward move during the tech selloff and are now trading in the mid-$900 handle.

Benzinga looked at some of other S&P 500 companies that could join the privileged club in the near-to-medium term.

• Intuitive Surgical, Inc. ISRG - $946.33
• AutoZone, Inc. AZO - $502.70

Considering the broader market, apart from Alphabet's Class A shares, Amazon and Priceline, Seaboard Cor SEB, NVR, Inc. NVR and Berkshire Hathaway Inc. (NYSE: BRK-A)'s Class A also trade above $1,000.

Berkshire's Class A shares trade at a whopping $256,120, with the astronomical valuation resulting from the fact that the shares haven't been split anytime in the past.

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Companies outside of the S&P 500 index that could top $1,000 include:

• Markel Corporation MKL - $979
• White Mountains Insurance Group Ltd WTM -$862
• Cable One Inc CABO - $727
• Graham Holdings Co GHC - $596
• Mettler-Toledo International Inc. MTD - $587
• Alleghany Corporation Y - $593
• Atrion Corporation ATRI - $660

Amazon scaled the threshold on June 2 on a closing basis, and held above the level for five sessions. After successfully challenging the $1,000 barrier once again on June 21, the stock was back below the level in three sessions amid the big tech selloff.

After offering its shares to the public at $18 in 1997, Amazon split its shares three times, once in 1998 (2:1) and twice in 1999 (3:1 and 2:1).

Meanwhile, Alphabet followed Amazon into the $1,000 club on June 5, although its journey above the level was only for three sessions. Incidentally, Alphabet has split its stock (2:1) just once, in 2014. The split created a new Class of shares called Class C shares, which carried no voting rights.

One of the reasons these stock prices have stratospheric levels is that they aren't big advocates of stock splits, which would drive down prices and make them affordable for retail investors.

Is it advantageous to hold these pricey shares? May be, may be not. Amazon trades at roughly 89 times its 2018 earnings per share estimate of $11.36 compared to roughly 25 times for Google.

The fundamentals of these high-fliers are strong, but are they strong enough to justify the hefty valuation levels?