American express, downtrending..... lost of costco, p2p competitors on the rise

Accuracy score :
97%

American Express Co  AXP
Summary (from latest annual report 2015 and quarterly report 2016)
•    Total equity  : 20.71 billion USD
•    Market Cap is 60.2 billion USD ( last price of the stock is 65.12 USD)
•    American Express Co is a payments, network and travel company, which offers credit payment card products and travel-related services to consumers and businesses
•    Equity of total company increased from 20.67 billion USD in 2014 to 20.71 billion in 2016
•    Company has 33.76 billion USD in cash on account (from latest quarterly report)
•     Total equity – cash on account = 20.71 billion USD – 33.76 billion USD = -13.05 billion USD
•    In 2016 company has 50.64 billion USD long-term debt, short – term debt is 2.34 billion USD                                                                                                                                                            (In 2014 company had 57.95 billion USD long-term debt, short – term debt was 3.48 billion USD)
•    In 2016 quarterly report - total equity increased to 20.71 billion  USD from 20.67 billion USD in 2014, total debt is 52.98 billion USD in 2016)
•    Company's revenue decreased in 2015 to 32.81 billion USD from 34.29 billion in 2014
•    Net income in 2015 was 5.16 billion USD, Net income in 2014 was 5.88 billion USD
•    In 2015 company paid 1.17 billion USD dividend to its shareholders

American Express Co  AXP
The American Express Company, also known as Amex, is an American multinational financial services corporation headquartered in Manhattan's Three World Financial Center in New York City, United States. American Express Co is a payments, network and travel company, which offers credit payment card products and travel-related services to consumers and businesses. Amex cards account for approximately 24% of the total dollar volume of credit card transactions in the US. Amex is the 5th largest credit card issuer in the U.S., and the 3rd largest payments processing network after Visa and MasterCard. On November 10, 2008, during the financial crisis of 2008, the company won Federal Reserve System approval to convert to a bank holding company, making it eligible for government help under the Troubled Asset Relief Program. The American Express Company has two U.S. bank, American Express Centurion Bank (“Centurion Bank”) and American Express Bank, FSB (“American Express Bank”), which are both FDIC-insured depository institutions.
Products and Services:
•    Charge and credit card products
•    Network services
•    Merchant acquisition and processing, servicing and settlement, merchant financing, and point-of-sale, marketing and information products and services for merchants
•    Fee services, including fraud prevention services and the design and operation of customer loyalty and rewards programs
•    Expense management products and services
•    Travel-related services
•    Stored value/prepaid products

The Company is a global services company that is principally engaged in businesses comprising four reportable operating segments: USCS, ICS, GCS and Global Network & Merchant Services (GNMS)
•    U.S. CARD SERVICES - is worth 35 billion USD  (represents 54% of total revenue)
•    INTERNATIONAL CARD SERVICES - is worth 9 billion USD  (represents 15.3% of total revenue)
•    GLOBAL COMMERCIAL SERVICES - is worth 6.26 billion USD  (represents 11.4% of total revenue)
•    GLOBAL NETWORK & MERCHANT SERVICES - is worth 10.15 billion USD  (represents 16.8% of total revenue)

Important history dates
•    During the 1980s, American Express embarked on an effort to become a financial services supercompany and made a number of acquisitions to create an investment banking arm. In mid-1981 it purchased Sanford I. Weill's Shearson Loeb Rhoades, the second largest securities firm in the United States to form Shearson/American Express.
•    In 1984, American Express acquired the investment banking and trading firm, Lehman Brothers Kuhn Loeb, and added it to the Shearson family, creating Shearson Lehman/American Express. In 1984, Shearson/American Express purchased the 90-year-old Investors Diversified Services, bringing with it a fleet of financial advisors and investment products. In 1988, Shearson Lehman acquired E.F. Hutton & Co., a brokerage firm founded in 1904, this was merged with the investment banking business and the investment banking arm was renamed Shearson Lehman Hutton, Inc.
•    In 1993, American Express decided to get out of the investment banking business

AXP standalone subsidiaries and acquisitions :
•    In March 2011, American Express completed the 685 million USD acquisition of Munich-based Loyalty Partner, operator of the Payback loyalty program in Germany and Poland and the i-Mint loyalty program in India
•    In 2011 Amex acquired Sometrics for 30 million USD
•    In 2010 Amex acquired Accertify for 150 million USD
•    In 2009 Amex acquired Revolution Money for 300 million USD
•    In last 15 years Amex spent 900 million USD on small acquisitions and investments in startups (Stripe, MobiKwik, BigCommerce, Ezetap, Bill.com, Kiip, LearnVest, Fancy, Wrapp, SavingStar, Rent the Runway, Radius, Warby Parker, Fancy, Ness Computing, iZettle, Clickable, Deem, Payfone, Ketera, Adaytum, StarCite, Telera, Calient Technologies, WR Hambrecht, HealthAllies.com, OutPurchase, Advanced Data Exchange, AvantGo, Foodline, PeopleFirst.com, Respond.com, Aurigin Systems, Lipstream, OpenTable)

Total = 2.06 billion usd

•    On February 12, 2015, it was announced that the partnership between American Express and Costco would dissolve March 31, 2016, which was later extended to June 19, 2016. American Express and Costco failed to reach an agreement that would have continued their partnership. By March 2, 2015, Costco announced that Citigroup would become the exclusive issuer of Costco's credit cards and that Visa Inc. would replace American Express as the exclusive credit card network accepted at Costco’s stores
•    The Costco partnership represented 8%, or $80 billion, of AmEx's billed business and about 20%, or about $14 billion, of its interest-bearing credit portfolio, according toJPMorgan Chase & Co
•    On May 12, 2015, Amex announced the authorization to repurchase up to 150 million shares of our common stock from time to time, in accordance with the their capital distribution plans approved by the Federal Reserve and subject to market conditions. This authorization replaced the prior repurchase authorization and does not have an expiration date
•    Amex repurchased 58.8 million common shares at an average price of $76.70 in 2015

 

Opinion about the company
Fundamentally it is a good company and in the future we can expect its growth (Total debt is big (52.98 billion USD), company has 33.76 billion USD in cash on account, ROE is around 25 %).

 

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