Product & Pricing Strategy - American Express raised the annual fee for its Platinum card to $895 [2] - The increased fee includes a "premium theme" that turns the app dark [2] - The dark mode theme is presented as a cardholder perk alongside benefits like restaurant points and rental car insurance [3] - The offering is compared to BMW charging $500 for slightly faster car performance, highlighting perceived overpricing [5] Customer Perception & Value - The value proposition of dark mode as a premium feature is questioned [1][2] - The offering is described as "ludicrous" and indicative of the credit card industry's excesses [5] - The aesthetic appeal of the dark mode app is acknowledged [3] - The new app features include welcome bonus progress tracking and account setup tasks in one dashboard [5]

American Express Company (NYSE:AXP) is one of the relatively cheap S&P 500 stocks Jim Cramer talked about. Cramer highlighted that the stock is cheaper than the S&P, as he commented: “Then there’s American Express, which just released a refreshed platinum card, you might have gotten it this weekend, that I’m sure will be a hit, especially with millennials and Gen Z. AMEX should have 12.6% earnings growth next year, just barely better than the market. And don’t be surprised if the actual earnings growth su ...

Core Insights - The current market presents a challenge for investors seeking safe places to allocate new capital, as the S&P 500 is experiencing record highs and significant rallies [1] - There are still opportunities to find relatively inexpensive stocks with above-average growth potential, particularly within the S&P 500 [2] Stock Selection - A screen identified 104 S&P 500 stocks with above-average growth and below-average price multiples, narrowing down to 86 after excluding energy and materials sectors [3][4] - T-Mobile is highlighted for its expected 19.4% earnings growth next year, trading at just over 18 times next year's earnings [4] - Royal Caribbean and Expedia are noted as strong travel stocks, with Expedia projected to grow earnings by 18% next year while trading at 13 times earnings, significantly cheaper than Booking Holdings [5] - Dollar Tree is identified as a consumer staples stock with a 15% growth rate, trading at less than 15 times next year's earnings, making it a favorable option [6] Financial Sector Opportunities - The financial sector is experiencing favorable conditions, with 34 of the 86 identified stocks coming from this sector [7] - Capital One Financial is projected to have nearly 14% earnings growth next year, trading at roughly 11 times next year's earnings [8] - American Express is expected to grow earnings by 12.6% next year, trading at less than 20 times earnings, which is cheaper than the overall S&P [9] - Citigroup is highlighted for its strong recovery under CEO Jane Fraser, with expected growth of 28% next year while trading at just 10.5 times earnings [10] - Keycorp, a regional bank, is expected to grow at 22% next year, trading at just under 11 times next year's earnings [11] Other Notable Stocks - Charles Schwab is recognized as a strong retail brokerage, while Apollo is noted for its leadership in private equity and private credit with projected earnings growth of 19% [12][13] - Insight, a biopharma company, stands out in the healthcare sector with expected earnings growth of 19% and trading at just under 12 times next year's earnings [14] - Caterpillar is noted for its strong performance, with an expected 18% earnings growth and trading at 22 times next year's earnings [15] - Dell Technologies is mentioned as a core player in AI infrastructure, while BXP, a real estate company, has rebounded after trimming its dividend to focus on growth projects [18][19] - Energy, a utility company, is highlighted for its growth potential due to infrastructure projects, including a $10 billion data center by Meta [20]

Core Viewpoint - American Express has demonstrated strong performance and resilience over the years, with a total return of 244% over the past five years, although future growth may not replicate this pace [2][4]. Group 1: Company Performance - American Express has increased its revenue by 8.4% year over year to $34.8 billion in the first half of 2025 [4]. - The company benefits from economic expansion and rising consumer spending, which supports sustainable growth [5]. - American Express has successfully attracted younger consumers, which could lead to long-term customer relationships as their financial situations improve [6]. Group 2: Competitive Advantages - American Express is recognized as a premium brand in the credit card industry, attracting affluent customers who present lower credit risk [7]. - The company charges higher processing fees to merchants, yet maintains a network of 100 million merchant locations that accept Amex payments, highlighting its value proposition [8]. - American Express operates its own payment infrastructure, creating a network effect that enhances its competitive position and makes disruption difficult [9]. Group 3: Valuation and Future Outlook - The current price-to-earnings (P/E) ratio for American Express is 21.9, near its highest level in three years, suggesting that the stock may be expensive [10]. - Management forecasts mid-teens earnings-per-share growth over the long term, indicating potential for the stock to double in five years if the P/E ratio remains constant [11].

Core Insights - Berkshire Hathaway, led by Warren Buffett, has a strong investment track record, particularly in American Express, which constitutes 21.6% of its $281 billion portfolio [2][4]. Company Overview - American Express (Amex) is Berkshire's second-largest holding, known for its strong brand and premium credit card offerings targeting affluent customers [4][5]. - The company has maintained its position in the market for nearly two decades, indicating brand durability and relevance [6]. Competitive Advantages - Amex benefits from a significant network effect, enhancing its value as it expands its merchant and cardholder base [7]. - Buffett's long-term holding of Amex shares for over a decade reflects his confidence in the company's business model [8]. Financial Performance - Over the past five years, Amex has seen a 65% increase in revenue, driven by a 30% rise in active cards and a 39% growth in payment volume [9]. - The company has generated a total return of 213% in the last five years, outperforming the S&P 500's 108% total return [10]. Future Outlook - Analyst estimates project Amex's earnings per share to grow at a compound annual rate of 14.4% from 2024 to 2027, suggesting a positive outlook for market performance [11]. - However, the current price-to-earnings ratio of 20.8 raises concerns about valuation, as it is among the highest in the past three years [11]. Investment Strategy - For investors interested in Amex, dollar-cost averaging over time may be a prudent strategy, especially given the above-average valuation concerns [12].

Group 1: Berkshire Hathaway's Performance and Strategy - In 2024, Berkshire Hathaway's stock performed well, with class B shares generating a 27% return, outperforming the broader market's 23% return [1] - Despite strong stock performance, Berkshire hoarded cash, was a net seller of stocks, and sold significant portions of its holdings in Apple and Bank of America, indicating a belief that the market is overvalued [2][5] - The combined positions in Apple and Bank of America accounted for 39% of Berkshire's portfolio at the end of 2024, raising questions about the company's future plans for these investments [5] Group 2: Investment in Apple - Berkshire first invested in Apple in 2016, building its position to around 40% of its $296 billion portfolio, with significant purchases made when Apple shares were below $50, now trading at $240 [3] - The decision to sell parts of the Apple position may reflect concerns about a potential market correction or economic downturn [6] Group 3: Investment in Bank of America - Berkshire invested $5 billion in Bank of America in 2011, acquiring preferred stock with a 6% annual dividend and warrants for 700 million shares at a strike price of $7.14, with the stock currently trading at about $44 [4] - Similar to Apple, the selling of Bank of America shares may indicate a strategy to realize profits amid market uncertainties [6] Group 4: American Express Investment - Berkshire has a long-standing relationship with American Express, first investing in 1991 and holding approximately 151.6 million shares by the end of 2024, which has not been sold in nearly 27 years [7][8][12] - American Express represents about 15% of Berkshire's portfolio and is unique due to its strong brand and credit card network, which provides a competitive moat [9][10][11]

Group 1: Berkshire Hathaway Overview - Berkshire Hathaway reported a 25.5% increase in stock value for the year, continuing its long-term performance of nearly 20% compounded annually since Warren Buffett became CEO [1][2] - The company’s investment portfolio is closely monitored by investors, with quarterly disclosures required for institutional investors with over $100 million in assets [2] Group 2: American Express - American Express has established itself as a premium credit card provider, attracting high-earning customers with exclusive offerings like the Centurion Card and the Platinum Card [4][5] - The company reported a 10% revenue growth to $74 billion and a 25% increase in earnings per share (EPS) to $14.02 last year [7] - Despite a recent stock decline due to earnings guidance, it is viewed as a buying opportunity for long-term investors [7] Group 3: Moody's Corporation - Moody's is the second largest credit rating agency in the U.S. and has been part of Berkshire's portfolio since its spin-off from Dun & Bradstreet in 2000 [8] - The company benefits from high barriers to entry in the credit rating industry and has a competitive advantage due to established reputations [9] - Moody's Analytics segment provides steady income through a subscription-based model, helping to offset weaknesses in its credit ratings business [11][12] Group 4: Chubb - Chubb is a multinational insurance company that has recently been added to Berkshire's portfolio, with 27 million shares acquired in late 2023 and early 2024 [13] - The company has a strong track record of underwriting profitability and has increased its dividend payout for 31 consecutive years [15] - Chubb's investment portfolio of $150 billion allows it to benefit from higher interest rates, resulting in a 20% increase in net investment income to $5.9 billion last year [16][17]