04. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 68
American Express Company (NYSE:AXP) continues to demonstrate strong financial performance, making it a compelling investment opportunity based on solid fundamentals. The company operates through multiple segments, including U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services, which collectively contribute to its diversified revenue streams. In the second quarter of 2024, American Express Company (NYSE:AXP) reported a remarkable earnings per share (EPS) of $4.15, significantly surpassing expectations of $3.26. This impressive result underscores the company’s ability to generate robust earnings growth, even in a challenging economic environment. The 9% year-over-year revenue growth, driven by strong performance across all major segments and geographies, highlights the resilience and scalability of American Express’s business model. A key driver of this growth is the company’s premium customer base, known for their high spending and excellent credit profiles. American Express Company (NYSE:AXP) continues to attract and retain these customers through superior product offerings, as evidenced by 24 consecutive quarters of double-digit growth in card fee revenue. Additionally, the company’s strategic investments in marketing, product innovation, and technology further enhance its value proposition, driving long-term customer loyalty and engagement.
Moreover, the sale of Accertify in Q2 2024 contributed an after-tax gain of $479 million, which the company plans to fully reinvest in its core business, reinforcing its commitment to sustainable growth. American Express Company (NYSE:AXP) disciplined expense management, combined with its ability to scale operations efficiently, enables it to invest heavily in growth initiatives while still delivering exceptional earnings. With an increased EPS guidance range of $13.30 to $13.80 for the full year, American Express Company (NYSE:AXP) is well-positioned to continue its upward trajectory, making it a strong buy for investors seeking reliable growth and solid returns.
The number of hedge funds in Insider Monkey’s database owning stakes in American Express Company (NYSE:AXP) grew to 68 in Q2 2024, from 66 in the preceding quarter. The consolidated value of these stakes is nearly $38.48 billion. Among these hedge funds, Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q2.
Artisan Select Equity Fund stated the following regarding American Express Company (NYSE:AXP) in its first quarter 2024 investor letter:
“American Express Company (NYSE:AXP) shares rose 22% this quarter. This is an interesting case study given our earlier discussion about inflation. American Express operates one of the largest credit card networks in the world. Its revenue is largely a function of a fee rate applied to the dollar value of goods and services that are transacted through its network. That dollar value is, of course, nominal. As inflation pushes up the value of those goods and services as it has for the past few years, American Express will capture that value through its fee structure. The past few years inflation has clearly been a benefit. Aside from its inherent inflation protection, the business is a very strong one. Payments continue to shift toward electronic forms, benefiting American Express. It also has a strong brand that attracts loyal and highly profitable customers that are the envy of the industry. Recent results have been strong with revenues moving nicely ahead of GDP.”
