This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

American Express Stockholder Since...

With discretionary spending going down and the ability of consumers to repay debt in question, most investors think it makes sense to steer clear of American Express (AXP - Get Report). And in the near term, I totally agree. However, over the long haul, I wouldn't bet against these guys.

What makes me so optimistic?

American Express has a terrific brand, and it's expanded into many different facets of financial services, including annuities, banking, mutual funds, charge cards and investment advisory services. As a result, I can't help but think that its efforts to build a "one-stop shop" will ultimately be successful. Put another way, I have no doubt in the near term that the lingering economic uncertainty and business interruptions caused by last month's terrorist attacks will take their toll. But for the most part, the worst appears to have been factored into the stock price.

So is now the time to invest?

  • Talbots
    Glenn Curtis

    and Tim Arango
  • Hasbro
    Arne Alsin

    and Gary B. Smith
  • Office Depot
    Arne Alsin
    and
    Chris Edmonds
  • Oracle
    Glenn Curtis
    and
    Jim Seymour
  • Homestore.com
    Glenn Curtis
    and
    George Mannes

Not quite (notice that I said "for the most part"). That's because the stock could have some more downside in the short term, particularly during tax-loss selling season. But its fundamentals remain intact, and the company certainly has the necessary capital to weather this economic storm.

What's more, American Express may be a great acquisition target, particularly at this price. In fact, a few companies are said to be eyeing Amex very closely, with potential suitors including Morgan Stanley Dean Witter (MWD), AIG (AIG) and Citigroup (C). Although some have questioned the potential for synergies and cost-savings related to such a deal, the fact the American Express now trades at just over three times book value and under two times sales, not to mention the fact that it's at the lower end of its 52-week trading range, is likely to spur further speculation.

In short, American Express isn't a trading play. It's a bet on the company's deep pockets, staying power and the outside chance that the company could be acquired. And to that end, the company is certainly worth a second look.

In keeping with TSC's editorial policy, Glenn Curtis doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Curtis welcomes your feedback and invites you to send it to Glenn Curtis.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AXP $77.71 0.62%
AAPL $126.97 -0.49%
FB $84.29 1.40%
GOOG $536.78 0.26%
TSLA $209.26 1.90%

Markets

DOW 18,000.80 -34.13 -0.19%
S&P 500 2,102.55 +2.15 0.10%
NASDAQ 5,020.7290 +26.1270 0.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs