American Express Company (NYSE:AXP)

great time to buy

Top Brand firm is undervalued as more transactions move to plastic globally.

After the current financial mess ends, they will still be standing and we will still be using our amex cards.

Should be ok.

People will always use Amex cards.

has been and will continue an outstanding buy.

warren type stock, five year low

go with Buffet

Incredible business with solid management. Currently trades at 10X earnings which is a huge bargain.

This is a solid company, and I just don't see it going much lower than this 5-year low that it is at now. Once gas drops below $100 barrel like some are (finally!) predicting, then a recovery for general spending and AMEX's delight will return.

"Rapid growth of lending balances over recent years" in regions of the U.S. with the worst real estate declines caused greater-than-expected losses, Scott Valentin, analyst at Friedman Billings Ramsey & Co., said in a research note today. "At no point in history have consumers incurred as much debt relative to wealth." He rates American Express "underperform."

Bloomberg is reporting American Express Falls Most Since 9/11 on Net Decline.

American express is facing some problems but its nothing that time can't fix for companies like this. I say buy and hold for a few years and it will bounce back up.

undervalued right now, world class brand with international recognition, and rich people are the only ones who own this card so little risk

Hugh cash flow machine. Could easily absorb even 15% default of outstanding loands and not have a loss.

I have owned this stock since the early 80's and it performed very well. But, since 2000, it hasn't done anything except lose me money! I finally dumped it all on Monday after losing thousands of dollars. I really don't see any financial stock doing very well for the next couple of years. After the housing crisis is over and oil drops to somewhere near a normal range... say... $50.00 which is a fair price.

American Express is an old stalwart whose core business, although impacted by the current financial and economic environment, should be largely unaffected in the long run and has been dragged down by investor sentiment. Clearly reduced transactions, reduced spending and increased charge-offs resulting from the mounting pressure on consumers will have an impact, the question is how much? The average AmEx cardholder has a better credit rating and higher income than his V or MA holding counterpart, which should correlate to a relatively smaller negative impact to AXP, as compared to V, MA and the lending institutions that utilize their products.

That is not to say that there will be no impact. Far from it. The current economic situation will likely continue into the foreseeable future. AMX has weathered poor situations like this in past years. As a matter of fact, looking back to the most recent economic downturn in 2001, AMX ended up cutting their YOY income by over 50% due to losses realized from the collapse of high yield securities. (sound familiar?) While not to the far-reaching extent of the current situation, they managed over the last seven year period to average a 13% annual increase in net income. Add in share buybacks and a steady dividend and you are looking at a 15%+ annual return to shareholders.

At a current P/E of just over 11, AMX is a steal considering the historical industry average of 18. A lot of pessimism is currently baked into the share price, but it appears to be largely short term (<= 2 years). Even if we project over the next 5 years that AMX will only grow net income by a measly 5% annual average, eliminate any future share buybacks, discontinue their dividend and we assume a more conservative valuation of 14 times earnings, we come up with an 11% average annual return. While nothing to write home about, this is a fairly conservative and grim outlook considering AMX's track record. With only marginal improvements to any of those figures you start to see the some very attractive returns for an old stalwart like American Express.

Amex is a strong brand, has strong customer loyalty and has always been known for innovation. I believe this stock is currently available at a discount because of weak consumer spending in late '07/early '08. Look for this to rise 10-20% in the next year or so.

I use my blue cash card for everything -- easy to understand rewards program. Their high rates of use allows them to charge merchants a higher fee. This is a Buffett company and with the recent lows, I'm a buyer

This blue chip, which is heavily owned by Warren Buffet, will rebound.