High-Priced Stocks Worth Every Penny

Penny stocks are one way to double your money, though it's fraught with risk, but there are equally shiny opportunities trading at the other end of the price spectrum, too. I call 'em "three-digit stocks," yet if they're anything like Berkshire Hathaway, they can trade in the four-, five-, and six-digit range, too.

penny stock might not be a good buy simply because it's cheap, and a three-digit stock shouldn't scare you away just because it carries a hefty price tag. Handsome is as handsome does. Let's check in with the Motley Fool CAPS community to see which of the high-priced stocks below earn the greatest confidence from our investor-intelligence database:


CAPS Rating (out of 5)

3-Digit Price

Return on Capital, TTM

Flowserve (NYSE: FLS  ) **** $105.52 15.8%
Public Storage (NYSE: PSA  ) * $101.24 4.9%
The Washington Post (NYSE: WPO  ) * $390.57 9.7%

Sources: Capital IQ, a division of Standard & Poor's; Motley Fool CAPS.

Just because these stocks are purring is no reason to jump into them blindly. Catching a tiger by the tail -- or a knife falling from on high -- can end up leaving you scratched and bleeding. That's why we recommend you use this list as a launch pad for your own research and analysis.

Despite pump and valve maker Flowserve beating earnings estimates and offering guidance in line with what analysts forecast, its shares were manhandled after its earnings report last month showed revenue was below expectations. From the U.S. to China and Mexico to India, governments that were investing in infrastructure as a way to spend their way out of the recession have begun curtailing those investments. Well, perhaps not the Chinese, who could easily spend another trillion dollars next year, too.

Earnings reports at other infrastructure companies, such as ITT  (NYSE: ITT  )  and Mueller Water  (NYSE: MWA  ) , were split as Flowserve's was, but their shares weren't affected the same way.

Yet 98% of the nearly 900 CAPS members weighing in on Flowserve still see it beating the market. Does that mean Flowserve is right for you? Add it to your watchlist and have all the Foolish news and analysis compiled for you in one place.

Not so rough
Remember all that talk about house prices hitting an inflection point? Yeah, not so much. Real estate website Zillow released a fairly devastating look at the market that essentially shows pricing won't recover till next year -- maybe. Nearly a quarter of all mortgages are underwater, and foreclosures are at Great Depression-era levels.

It wouldn't surprise me if that's correlated to the robust earnings report that self-storage company Public Storage issued, which showed revenue well ahead of estimates, widening profit, and climbing same-store sales. You have to put all that stuff from homes somewhere. That would seem to be underscored by the results of AMERCO (Nasdaq: UHAL  ) , the parent of self-moving company U-Haul, which reported an increase in both in-town and one-way transactions.

But less than two-thirds of CAPS members rating Public Storage think it will outperform the broad market averages. Perhaps there was the hope that the housing crisis was abating, as the headlines told us, and fewer of us would need to put stuff in storage. You can let us know what you think about the company in the comments section below or on the Public Storage CAPS page.

Triple-digit titans
Newspapers are declining in popularity as the Internet steals more eyeballs, thus we'll see The Washington Post, The New York Times (NYSE: NYT  ) , and other "papers of record" continue to be put out with the trash.

Compared with its rivals, however, the Post came out ahead, helped in a big way by its Kaplan education division, which accounts for more than 60% of revenue. That outsized contribution might become limited as government scrutiny of for-profit educators ramps up. You won't get an argument from CAPS member pchop123, who sees all similar "old media" caught up in a death spiral.

You can post the Post in the Fool's free portfolio tracker, and add your opinion on The Washington Post CAPS page, too.

Count to 10
These three-digit stocks might be on their way to even higher valuations. That's why it pays to start your own research in Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Berkshire Hathaway and ITT are Motley Fool Inside Value selections. Berkshire Hathaway is a Motley Fool Stock Advisor pick. Mueller Water Products is a Motley Fool Hidden Gems selection. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Fool has a disclosure policy.

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10/24/2016 4:02 PM
FLS $43.47 Down -0.13 -0.30%
Flowserve CAPS Rating: ***
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