Greg Abel Takes Over as Berkshire Hathaway CEO and Maintains Focus on Long-Term Compounders Like American Express
On Jan. 1, Greg Abel succeeded Warren Buffett as CEO of Berkshire Hathaway (BRKA) (BRKB), inheriting a vast portfolio including major holdings in companies like Apple, Coca-Cola, and American Express (AXP). Abel has already made significant changes to the investment portfolio, increasing stakes in key positions such as Alphabet. Despite recent volatility, American Express remains one of Berkshire's top investments due to its long-term growth potential. American Express recently reported strong second-quarter performance with a 9% increase in card member spending and raised full-year revenue guidance for 2026. The company expects earnings per share between $17.30 and $17.90, which would be record highs. Despite a post-earnings sell-off that brought the stock down nearly 12% year to date, American Express continues to deliver consistent dividend growth and aggressive buybacks. The payment processor's business model benefits from affluent customers who are less sensitive to inflationary pressures due to discretionary spending patterns. The company’s strong gross margin of 59.74%, a current price-to-earnings ratio of around 18.5, and its long-term track record make it an attractive value stock for investors.
Topics: American Express Berkshire Hathaway Leadership Transition Portfolio Changes