American Express Company (AXP)

I developed a tool called "liquidation ratio" (LR) for financial institutions. It is a quick and dirty method but captures a lot of data. LR = Cash + Account Receivables-Accurred Intereset / Long-Term Debt. Mr. Market seems to be punishing AXP because it has lower Net Earnings than expected as well as a large long-term debt obligation. Digging through their finanicial statements over the past 10 years showed me that it could consistently retire its' short- and long-term debt in a year or two using only Cash and AR-AI. This currently holds true. Also its' payouts of the debt are relatively small each year with the best interest rates available. Additionally, it currently has a decent amount of Retained Earnings. AXP has a much lower reserve of Treasury Stock than it has had in the past but on the other hand it doesn't have ongoing operating expenses that can make a good company a poor investment--R&D, Patents, Depreciation, etc. Two other positive indicators are steady Price Per Share Earnings and a consistent amount of outstanding stocks in the past 10 years. And of course, people who use a good portion of their services whether for credit, travel, or advice/planning have better than average earning powerr. It doesn't hurt to have a "billion dollar" brand name either. So as the economy picks up so will this stock. Its' underlying business economics have proven the test of time and their stocks are ripe for the picking at $23 a share.