Warren Buffett has gained the reputation of a buy-and-hold investor, but he has bought and sold many stocks over the years as CEO of Berkshire Hathaway. In 2024, for instance, he pulled a lot of money out of stocks Berkshire owned. Through the third quarter, Berkshire had sold $133 billion worth, including a majority of its Apple position. This is up from $33 billion of equity sales during the same period in 2023.Buffett is raising cash as valuations become more expensive across the stock market. The S&P 50 ...

Berkshire Hathaway has compounded investor capital at a nearly 20% annual rate for decades. That wonderful gain is about double the yearly pace of the broader S&P 500. Such a fantastic track record unsurprisingly draws a lot of attention to what portfolio moves the Oracle of Omaha makes and what his conglomerate owns. The average investor can try to find new ideas.One of Warren Buffett's top positions is in this unstoppable financial stock that has soared 123% in the past 15 months. Should you buy shares in ...

Group 1: Company Overview - American Express operates in the payment processing space, focusing on connecting high-net-worth customers with sellers of goods and services [2] - The company differentiates itself by targeting wealthier customers, who tend to be more resilient during economic downturns [3] Group 2: Investment Perspective - Warren Buffett's investment in American Express is based on a long-term view rather than current excitement about the stock [9] - The current price-to-earnings (P/E) ratio for American Express is over 20x, significantly higher than the 10x ratio during Buffett's previous investments in the mid-1990s [7] - American Express appears expensive based on traditional valuation metrics, with elevated price-to-sales, price-to-cash flow, and price-to-book ratios compared to their five-year averages [8] Group 3: Investment Strategy - Buffett's investment philosophy emphasizes not overpaying for stocks, which is a lesson derived from Benjamin Graham's value investing principles [5][10] - Even a strong company like American Express can be a poor investment if purchased at an inflated price, suggesting that potential investors should wait for a significant price decline before considering an investment [11]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: American Express (AXP) - American Express currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4] Price Performance - Over the past week, AXP shares increased by 2.81%, while the Zacks Financial - Miscellaneous Services industry rose by only 0.1% [6] - In the last month, AXP's price changed by 6.82%, significantly outperforming the industry's 0.68% [6] - Over the past quarter, AXP shares have risen by 14.9%, and over the last year, they have increased by 55.3%, compared to the S&P 500's gains of 4.45% and 25.58%, respectively [7] Trading Volume - AXP's average 20-day trading volume is 2,354,050 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the past two months, 8 earnings estimates for AXP have been revised upwards, while only 1 estimate was revised downwards, leading to an increase in the consensus estimate from $15.16 to $15.33 [10] - For the next fiscal year, 5 estimates have moved upwards with no downward revisions, indicating positive earnings momentum [10] Conclusion - Given the strong price performance, positive earnings outlook, and high Momentum Style Score, AXP is recommended as a promising investment opportunity [12]

Core Insights - Berkshire Hathaway maintains a strong focus on the financial sector through its public equity portfolio and insurance businesses [1] - American Express, Visa, and Mastercard are key holdings in Berkshire's portfolio, with potential for growth in 2025 and beyond [2] Company Performance - American Express has been a core holding for Berkshire since 1991, achieving a 58.4% gain in 2024, making it the third best performer in the Dow Jones Industrial Average [3][4] - American Express constitutes 15.9% of Berkshire's portfolio, significantly larger than Visa at 0.9% and Mastercard at 0.7% [5] Business Models - American Express operates a closed-loop payment network, contrasting with Visa and Mastercard's open-loop systems [6] - American Express issues its own cards, allowing for greater control over merchant fees and interest income, while Visa and Mastercard rely on banks for card issuance [7][8] Financial Metrics - American Express has a market cap of $220 billion, compared to $482 billion for Mastercard and $619 billion for Visa [9] - Over the last five years, American Express has delivered a total return of 154%, outperforming Mastercard and Visa [9] Valuation and Dividends - American Express has a forward P/E ratio of 20.5, lower than Visa's 28.6 and Mastercard's 32.3, indicating a more attractive valuation despite lower margins [10] - All three companies have increased dividends significantly over the past decade while repurchasing shares, leading to faster earnings per share growth [12][13] Market Trends - The transition from cash to digital and mobile payments is a long-term advantage for these companies, with Visa and Mastercard being recession-resistant [14] - Financials were the second best performing sector in 2024, with payment processors potentially being better buys due to lower cyclicality [15] Investment Strategy - Investing equally in American Express, Visa, and Mastercard is a reasonable approach for new investors, though individual research is recommended [16] - Visa is highlighted as a top pick among the three, benefiting from sustained economic growth and lower regulations [17]

Market Overview - Stocks experienced volatility on Friday, but all three major benchmarks recorded weekly gains. The Dow Jones Industrial Average closed down 0.3% at 44,424, the S&P 500 fell 0.3% to 6,101, and the Nasdaq Composite decreased by 0.5% to 19,954 [1]. Federal Reserve Insights - The Federal Open Market Committee (FOMC) is expected to maintain the federal funds rate during its upcoming meeting, despite President Trump's call for immediate rate cuts [2][3]. - Fed Chair Jerome Powell indicated that any further rate cuts would depend on progress in addressing inflation concerns [4]. Inflation Concerns - The University of Michigan reported a rise in year-ahead inflation expectations to 3.3% in January from 2.8% in December, marking the highest level since May 2024. Long-term inflation expectations also increased to 3.2% from 3.0% [5]. - Concerns regarding inflation were echoed in consumer interviews, linking them to anticipated policies such as tariffs [6]. Company Earnings and Stock Movements - American Express reported higher-than-expected fourth-quarter earnings and revenue, driven by strong card member spending, and announced a 17% dividend increase. However, its stock fell 1.4% due to a full-year earnings per share forecast that did not meet some analysts' expectations [7]. - Verizon Communications saw a 0.9% increase in its stock after surpassing earnings expectations, aided by a 3.1% rise in wireless revenue attributed to price hikes and sales incentives [8]. - Novo Nordisk's stock surged 8.5% following positive early-stage results for its weight loss drug, Amycretin, with analysts suggesting the company deserves a higher valuation based on its growth outlook [9][10]. - Twilio's stock jumped 20.1% after the company presented financial targets for fiscal years 2025 to 2027 that exceeded analyst expectations, with analysts expressing confidence in the company's growth trajectory [11][12].

Core Viewpoint - American Express Company (AXP) reported strong fourth-quarter 2024 earnings, with earnings per share (EPS) of $3.04, a 16% year-over-year increase, and total revenues of $17.2 billion, an 8.7% year-over-year improvement, both exceeding consensus estimates [1][2]. Financial Performance - The fourth-quarter earnings were driven by record high card member spending and fee growth, alongside new card acquisitions, particularly among Millennials and Gen-Z [3]. - Network volumes reached $464 billion, a 7% year-over-year increase, surpassing the consensus estimate of $458.7 billion [4]. - Total interest income was $6.1 billion, a 9% year-over-year increase, but fell short of the consensus estimate of $6.2 billion [4]. - Provision for credit losses decreased by 10% year over year to $1.3 billion [4]. - Total expenses rose by 11% year over year to $13.1 billion, primarily due to increased customer engagement and marketing costs [5]. Segment Performance - The U.S. Consumer Services segment reported pre-tax income of $1.5 billion, a 5% year-over-year increase, and total revenues of $8.3 billion, up 12% year over year [6]. - The Commercial Services segment's pre-tax income was $814 million, a 22% year-over-year increase, with total revenues of $4.1 billion, growing 8% year over year [7]. - The International Card Services segment saw a significant decline in pre-tax income to $34 million, down 76% year over year, despite total revenues improving 11% to $2.99 billion [8]. - The Global Merchant and Network Services segment reported pre-tax net income of $853 million, a 4% year-over-year increase, but total revenues declined by 2% to $1.9 billion [9]. Balance Sheet and Capital Deployment - As of December 31, 2024, cash and cash equivalents were $40.6 billion, down from $46.6 billion at the end of 2023, while total assets increased to $271.5 billion [10]. - Long-term debt rose to $49.7 billion, and shareholders' equity improved by 8% year over year to $30.3 billion [10][11]. - The company repurchased 3 million common shares in the fourth quarter and plans to increase its dividend to 82 cents per share starting in the first quarter of 2025 [12]. Future Outlook - For 2025, AXP anticipates revenue growth between 8% and 10% from the 2024 level of $65.9 billion, with EPS expected in the range of $15-$15.5, indicating an 8.9% improvement from 2023 [13]. - The company projects long-term revenue growth of over 10% and mid-teens growth in EPS [14].

Core Insights - Young consumers, particularly millennials and Generation Z, are significantly contributing to the growth in credit card spending, especially for American Express, which reported double-digit increases in spending from these demographics in Q4 [1] Group 1: Financial Performance - American Express reported total billed business of $376.7 billion, reflecting an 8% year-over-year increase on an FX-adjusted basis, although this growth was slightly below the 9% increase in overall U.S. consumer spending [2] - Spending by millennials and Gen Z accounted for 34% of U.S. consumer spending, with a notable increase of 16%, while older cohorts saw mid-single-digit percentage growth [3] - Commercial spending also grew, with a 4% year-over-year increase in Q4, and spending by U.S. small- to medium-sized businesses (SMBs) rose by 3%, while large and global businesses increased spending by 7% [3] Group 2: Market Trends and Consumer Behavior - CEO Steve Squeri highlighted that the growth in billings was supported by robust holiday spending and expressed confidence in attracting new premium customers, particularly from younger demographics and small businesses [4] - Fee-based consumer premium cards are experiencing rapid growth, with American Express holding a 25% market share in this segment, which is particularly favored by younger consumers [5] - The CFO noted that spending was broad-based across various sectors, including travel, entertainment, goods, and services, with total loans and card member receivables increasing by 9% [6] Group 3: Credit Performance and Economic Outlook - American Express reported stable credit performance, with net write-off rates of card receivables at 1.9% in Q4, down from 2.1% at the beginning of the year and 2.2% pre-pandemic [6] - Delinquency rates remained stable at 1.3%, consistent with the previous year and lower than pre-pandemic levels [6] - Squeri noted that travel spending has accelerated alongside consumer confidence, indicating a positive outlook for both consumer and small business confidence [7]

Financial Data and Key Metrics - The discussion contains forward-looking statements about the company's future business and financial performance, based on management's current expectations, which are subject to risks and uncertainties [3] - The discussion includes non-GAAP financial measures, with comparable GAAP financial measures available in the earnings materials posted on the company's website [4][5] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to individual markets were provided in the content Company Strategy and Industry Competition - No specific details on company strategy or industry competition were provided in the content Management Commentary on Operating Environment and Future Outlook - The discussion contains forward-looking statements about the company's future business and financial performance, indicating management's expectations for future performance [3] Other Important Information - Factors that could cause actual results to differ materially from forward-looking statements are included in the presentation slides and SEC reports [4] - All earnings materials, including GAAP financial measures, are available on the company's website [5] Q&A Session Summary - No Q&A session details were provided in the content

Market Overview - The S&P 500 reached a new all-time closing high, while the Nasdaq has led major indexes over the past week but lags over the past month [1] - Currently, major indexes are experiencing declines, with the Dow down by 118 points, S&P down by 10 points, Nasdaq down by 31 points, and Russell 2000 down by 5 points [2] Q4 Earnings Results - American Express (AXP) reported Q4 earnings of $3.04 per share, beating expectations by a penny, with revenues of $17.18 billion, slightly above consensus [3] - Verizon (VZ) also exceeded Q4 earnings expectations with $1.10 per share, and revenues of $35.68 billion, which was 0.79% above consensus [4] Economic Indicators - S&P flash Services PMI for January is expected to be 56.5, indicating growth but slightly below the previous month's 56.8 [5] - Existing Home Sales for December are projected to increase to 4.2 million from 4.15 million, indicating resilience in the housing market despite high mortgage rates [6] - Consumer Sentiment for January is expected to remain flat at 73.2, still below last year's April highs but showing potential for improvement due to recent market optimism [7]