Warren Buffett Disciple Guy Spier’s 10 High Conviction Stock Picks

2. American Express Company (NYSE:AXP)

Value of Aquamarine Capital Management’s 13F Position (6/30/2024): $48.6 million

Number of Hedge Fund Shareholders (3/31/2024): 68

The second-largest stake in Guy Spier’s 13F portfolio is American Express Company (NYSE:AXP), which has several of the same tailwinds buffeting it as noted with Mastercard above. AXP is also the third-most popular stock in Warren Buffett’s 13F portfolio as of March 31, with the Oracle of Omaha owning nearly 152 million shares. American Express is otherwise less popular than its larger rivals among hedge funds, with their ownership of the company remaining flat during Q1.

American Express Company (NYSE:AXP) enjoyed a strong second quarter, growing organic earnings by 21% year-over-year and by 44% when factoring in its sale of digital fraud prevention company Accertify to a private equity firm. Revenue also hit a record quarterly high during Q2, having grown by close to 50% in the last three years, and is expected to increase by about 10% this year. Analysts project the company’s earnings to grow 15% annually in the years to come, which will continue to support its dividend, which was raised by 17% this year.

Artisan Select Equity Fund discussed how American Express Company (NYSE:AXP)’s fee structure has helped drive profit growth in its Q1 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.”