Abstract: Explain the reasons selling US stock American Express (AXP) and buying PayPal (PYPL) and share my views.
Transaction detail
What I want to share with you today is the transaction I made on August 2. The details are as follows:
Sold stock
- American Express Company (US stock code: AXP)
- Quantity: 30 shares
- Sold price: US$169.761
- Commission fee: US$0.39
Image source: https://seekingalpha.com/symbol/AXP/chart
Bought stock
- PayPal Holdings Inc (US stock code: PYPL)
- Quantity: 20 shares
- Bought price: US$273.5
- Commission fee: US$0.41
Image source: https://seekingalpha.com/symbol/PYPL/chart
Reasons for selling AXP
American Express’s holdings have been bought for a period of time and have accumulated a certain amount of gains. Of course, the rise or fall of stocks is generally not a reason for me to buy or sell, but after reviewing my US stock holdings portfolio, there are three financial sector stocks that I am holding, including American Express, Visa (US stock code: V) and MasterCard (US stock code: MA), of which AXP accounts for the highest percentage of positions due to the largest increase. I think these three financial U.S. stocks are undoubtedly good stocks. They are all relatively traditional financial service stocks and have a very good business foundation. In addition, their business is very stable and they also have very good earning power and ROE. However, after reviewing the long-term holding plan, I believe that it is necessary to introduce new types of financial service company stocks with better growth prospects. Therefore, I want to take advantage of the current high AXP share price and appropriately rebalance the investment portfolio, hoping to increase the long-term investment returns of my portfolio.
Reasons to buy PYPL
I mainly considered PayPal or Square Inc (US stock code: SQ). After studying relevant information and comparison, the market generally believes that PYPL is relatively matured and has a higher market share with more diversified products; on the other hand, SQ is a relatively new company with excellent growth, and their new products such as CashApp are very popular in the market, the user growth and daily active users (DAU) are doing very well.
The main reasons why I chose PYPL are as follows:
- PYPL’s latest share price fell due to factors such as the newly released second-quarter results worse than analysts’ expectations and the expected slowdown in third-quarter performance. Therefore, the current price fell by about 12% in such a short period of time from the peak of last month at US$310. The price-earnings (PE) ratio is now about 65 times, the stock price is relatively attractive.
- On the contrary, SQ surged by more than 10% in a single day on August 2, which may be due to the recent announcement of SQ’s acquisition of the Australian company Afterpay for US$29 billion (entire share-based transaction), with a P/E ratio of 216, which is very expensive compared to PYPL.
Image source: https://seekingalpha.com/symbol/SQ/chart
Based on the above reasons, I decided to buy PYPL and plan to increase the position of PYPL gradually if it falls further, depending on the market sentiment.
Comments and sharing
If you have any questions, please feel free to leave a message or comment below, I will reply you. Or if you find anything incorrect in the article, please let me know and learn from you. If you find it interesting or it may help you in any sense, please share with other people.
