Berkshire Hathaway is the largest investor in American Express.
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It is said that being a CEO is a lonely job but it helps when you can invest in the oracle Warren Buffett as a trusted advisor.
that was the sum of
American Express
(ticker: AXP) Chief Executive Officer Stephen Squerry who recently sat down with Baron’s Andy Server. Buffett’s
Berkshire Hathaway
According to FactSet data, American Express is the largest shareholder, holding about 20% of the shares.
Being such a large and influential investor can seem overwhelming, but Squerry says he enjoys accessing Buffett’s vast experience and talking with him several times a year.
“I talk to Warren maybe once every other month,” Squerry said. “It’s quite thrilling. You talk about tremendous experience, tremendous insight, and it’s available to you, you pick up the phone. It’s very special.
This insight was especially important for Squery at the start of the pandemic in early 2020. Overnight, the company, whose slogan was “Don’t leave home without it”, was thrust into a world where people were barely leaving their homes. With consumers unable to spend on travel and entertainment,
amex
Revenue fell 17% in 2020 from the prior year. Navigating that dynamic was challenging for a company synonymous with business and luxury travel, but Squerry says Buffett offered sound guidance.
“His advice to me is, protect two things, protect your customers and protect your brand, which is why we invested in the pandemic. It would have been very easy to scale back even more, but we invested more in the value proposition for our customers, we invested in our partners, and we invested in our brand,” Squerry said.
He paid. Over the past three years, shares of American Express are up 87% as of Thursday’s close, which has topped American Express’ performance.
S&P 500
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Which advanced 66% over that period. In his annual letter to Berkshire’s shareholders, Buffett appears pleased that the firm paid $1.3 billion for its stake in American Express and now receives $302 million in annual dividends from the company; Berkshire’s stake in the credit card company was valued at $22 billion at the end of 2022.
Few of us can imagine matching Buffett’s success in any investment, but there are reasons to invest in American Express, with Squerry pointing to the company’s history of delivering high-revenue growth and midtensies earnings per share. Where did you go?
“You might want to think about it,” said Squerry.
Write to Carleton English at [email protected]