Hedge Funds Pile into American Express Amid Market Skepticism

American Express (AXP) is attracting more investors as several hedge funds and other institutional investors have been buying shares of the payment services company in recent quarters. According to a recent Form 13F filing with the Securities & Exchange Commission, Segall Bryant & Hamill LLC bought 26,367 new shares of AXP's stock worth approximately $8,068,000.

This is not an isolated instance as other hedge funds have also been increasing their stakes in American Express. For example, Norges Bank bought a new stake in shares of American Express in the 4th quarter worth about $2,464,215,000. Capital World Investors lifted its holdings in shares of American Express by 46.7% in the 4th quarter.

Despite this increase in investor interest, analysts are cautioning that the market's negative response to AXP's second-quarter report could be a headwind for the stock. Although earnings slightly beat estimates and revenue was broadly in line with expectations, investors may have wanted stronger evidence that accelerated spending and premium-product adoption will justify current valuation levels.