A common psychological phenomenon among investors is the appeal of the stock with a low price per share—meaning a company with shares that trade at a low cost, not necessarily one in which shares are undervalued.
The perception that price movements among these companies can have a greater impact on an investment and that low-priced stocks must be a good deal drives this line of thought. The reality, however, is that the absolute price of a stock may not by itself have much of an impact on an investor's potential for gains.
