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 Quote). 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?

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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 Quote), AIG(AIG Quote) and Citigroup(C Quote). 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.