Tag Archives: American Express

Some links

No quick fixes for American Express ? And a good post from Punchcard blog on Amex and competition.

Interested in Australian stocks ? Try the Forager Fund blog and the fund reports.

Good post on Italian stocks (Finmeccanica, Piaggio, CIR)

Damodaran on negative interest rates and valuation

The story of “fracking pioneer” Aubrey McClendon

Muddy Waters has updated its Casino short thesis (h/t Valuewalk)

American Express (AXP) – Cheap “Buffett” Blue Chip or Value trap ?

Executive summary: Although American Express looks cheap based on their historic profitability, the company is subject to rapid technological change and fierce competition in the payment industry. To me it is not clear how this will work out going forward, so for the time being I will not invest but look deeper into the industry.

american-express

American Express is well known in value investment circles because Buffett owns ~15% of the company and made a lot of money with it.

Recently the stock price came under pressure mainly because:

  • they lost a big co-branding contract (Costco) which will materialize in 2016
  • EPS shrank for the first time since 2001
  • lost a court case (vendors steering clients to cheaper cards)
  • “fintech hype”: mobile payment & peer-to-peer lkoan platforms as disruptors

The stock price clearly has suffered and is down more than -40% from its peak in late 2014 /early 2015:

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