It was announced this week that American Express cards will soon be accepted at Sam's Club (the eighth largest U.S. retailer and a leading membership warehouse club for small businesses and consumers). We view this as an incremental positive for American Express (AXP), especially after losing their exclusivity deal with Costco earlier this year.
We consider now a great time to invest in American Express because the stock is trading at an attractive valuation. The valuation is attractive because the market over-reacted to some negative news earlier this year (i.e. AXP has underperformed the broader market year-to-date due to the loss of Costco exclusivity as mentioned above, and due to a negative antitrust ruling). However, AXP is still an extremely profitable company, with lots of room to grow, and an attractive dividend yield. You can read our complete AXP thesis here.