American Express (AXP) Target of ValueAct Capital

Posted on Aug 11 2015 - 6:57am by Sharpe Trade

(We continue from the previous ‘Sharpe Income’ entry)

You may have noticed that in the last few days, that American Express (AXP) stock price has jumped to the tune of +9%.

American Express (AXP) – 30 Minute Chart (tradingview.com)

ValueAct Capital American Express 30 Minute Chart

News broke last week that ValueAct Capital has taken a one billion dollar stake in American Express (AXP) …

“ValueAct Capital Management has amassed a stake in American Express Co., people with knowledge of the matter said, as the activist fund considers pursuing shareholder-friendly changes at the credit-card issuer.

ValueAct’s investment is about $1 billion — still less than 5 percent of American Express — said the people, who asked not to be identified because the holding isn’t yet public. American Express jumped 6.3 percent to $79.72 at 4 p.m. in New York, the most in four years, for a market value of about $80 billion” – Bloomberg 

If you search through past Sharpe Income posts, will you find that I ‘predicted’ this on a previous entry?  Did I have any idea such a move was coming?

Absolutely not.

I will say that I do not think it an accident that when I use the same type of formulaic approach to purchasing companies at a great value, that Hedge Funds with billions in capital use? Especially one with a name like ValueAct?   Well … this really isn’t much of a ‘surprise’.

Investing profitably for the long term is not about prediction.  It’s about calculating what is trading at a great value and letting the market take care of the rest.

(We continue the ‘Sharpe Income’ project in this next entry).

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