Being a CEO is said to be a lonely job, but it helps when you can count investing oracle Warren Buffett as a trusted adviser.
That was the summation of
(ticker: AXP) Chief Executive Stephen Squeri, who recently sat down with Barron’s Andy Serwer. Buffett’s
(BRK.A) is American Express’ largest shareholder, holding about 20% of its shares, according to FactSet data.
Having such a large and influential investor might seem overwhelming, but Squeri says he enjoys having access to Buffett’s vast experience.
“I probably talk to Warren once every other month,” Squeri said. “It is quite a thrill. You talk about tremendous experience, tremendous insight, and to have that available to you, you pick up the phone. That’s pretty special.”
That insight was especially important to Squeri at the onset of the pandemic in early 2020. Overnight, the company—whose slogan was once “Don’t Leave Home Without It”—was thrust into a world where people were barely leaving their homes at all. With consumers unable to spend on travel and entertainment,
revenue fell 17% in 2020 from the prior year. Navigating that dynamic for a company synonymous with business and luxury travel was challenging, but Squeri 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 pretty easy to pull back even more, but we invested more in value propositions for our customers, we invested in our colleagues, and we invested in our brand,” Squeri said.
That has paid off. Over the past three years, American Express shares have gained 87% as of Thursday’s close, topping the performance of the
which advanced 66% over that period. Buffett seems pleased, noting in his annual letter to Berkshire shareholders 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 could imagine matching Buffett’s success in any investment, but there are reasons to invest in American Express, Squeri said, pointing to the company’s history of delivering high-revenue growth and midteens earnings per share.
“You may want to think about it,” Squeri said.
Write to Carleton English at firstname.lastname@example.org
Read the full article here
Discussion about this post