$42.19

0.40 (0.96%)

7/18/2008 4:01 PM

American Express Company (AXP)

CAPS Rating:

The Company, together with its consolidated subsidiaries is a global payments, network and travel company which offers its products and services throughout the world.

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What the Community Thinks

Total Players

1732 Outperforms

163 Underperforms

All-Stars

458 Outperforms

65 Underperforms

Wall Street

19 Outperforms

1 Underperforms

Players bullish on AXP are also bullish on:

Players bearish on AXP are also bearish on:

Ticker Tags

Top Brands 2006 (64), Buffett Stock (50), Financial Data Processing (14), Top Brands 2005 (65), Mega Cap (146), New York (30), S&P 500 (481), Dow (30), Credit Services (49), Credit Card (10)
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American Express Company At A Glance

Current Price:	$42.19
Last Trade Time:	7/18/2008 4:01 PM
Open:	$41.97
Previous Close:	$41.79
Daily Range:	$40.50 - $42.35
52-Week Range:	$35.55 - $65.67
Volume:	16,856,019
Market Cap:	$48.41B
P/E Ratio:	12.40
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Stock Trends

AXP VS S&P 500 (SPY)

News & Discussion Boards

Other News Headlines for AXP

Business, economic events for the coming week
7/18/2008 5:45:00 PM - AP
Treasury prices decline for 3rd straight session
7/18/2008 5:36:00 PM - AP
Credit Suisse hires Lehman's former CFO Callan
7/15/2008 3:38:00 PM - AP
Hezbollah attack victims' relatives sue 2 banks
7/15/2008 8:05:00 AM - AP

More Headlines...

Top Bull Pitch

Recs

7 American Express Company (AXP)

Avatar JDSancho (98.38) Submitted: 6/17/08 9:11 PM

AMEX's stock has declined almost 8% since my blog post, but I'm not selling. In fact, I'm looking to add to my position. I advise you to look at my blog post here:

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=59934&t=010017...

Here are the highlights, IMO:

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ...More

Replies: 0 | Reply | Permalink

AMEX's stock has declined almost 8% since my blog post, but I'm not selling. In fact, I'm looking to add to my position. I advise you to look at my blog post here:

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=59934&t=01001757624174054375

Here are the highlights, IMO:

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The Express Ticket To Weathering The Financial Storm (Present & Future)

American Express (AXP) currently $45, 2010 Target price = $65 (44% discount). There are only three financials I am touching with a 10ft. pole: Goldman Sachs, Visa, and American Express. Okay, Visa is not really a financial. Regardless, people are expecting the entire financial sector to “turn around” in a blink of an eye, but it’s not going to happen. There are a few good reasons, but most importantly, their business models are changing. As a result of the “credit crisis / sub-prime mortgage / exotic derivative business I cannot even fathom” fallout, the rules of the game have changed. How can I accurately value stock in a company that does not even know what it is carrying on their own balance sheet? Investing under those conditions is called speculation, and it’s not for me. I tend to agree with Charlie Munger when he said, “All intelligent investing is value investing.” [1] And value investing is what I’m doing buying American Express...

Warren Buffett said this of Amex’s CEO in his 2006 Letter to Shareholders: “There are many giant company managers whom I greatly admire, Ken Chenault of American Express…quickly comes to mind”. [2] (All of his Letters to Shareholders can be found at www.berkshirehathaway.com.) Buffett knows Amex, having held it in his portfolio for decades. American Express accounts for almost 10% of Berkshire Hathaway’s investment portfolio. Sure, management has missteped in the past (Chenault was paid $31M in 2001 after a horrible year), but I think Amex’s board of directors have gotten executive pay right this time around. Please read this article if you are remotely interested in an Amex position...

American Express’s business model will not fail in the long run. Amex runs a “toll keeper” model, collecting activity based fees on reoccurring transactions. Amex does not have the largest payment network (Visa does), but its pricing power, high barriers to entry, wide moat, and high switching costs yield a constant stream of earnings...

Amex is known and respected here in the United States, and its presence internationally is growing fast. American Express ranked 15th on the list of BusinessWeek’s World’s Most Valuable Brands in 2007 with an estimated value of $20B. [4]That is over 1/3 of its current total market value...

Conservatively, I think we will see a double in American Express in 5 years. Some can’t wait that long. I think in 2010, Amex will trade between $60 - $65. This conservative estimate is based on earnings per share of $4.25. That offers purchases today at $45, a 40 – 45% discount. That sounds good enough for me to begin a CAPS outperform, and to increase my personal portfolio’s American Express position.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Head over to my blog for the full read. Let me know if you agree, disagree, or have a point to add that I've overlooked. Have fun, and use American Express at your local checkout counter!

Top Bear Pitch

Recs

3 American Express Company (AXP)

Avatar rgsauve (85.96) Submitted: 2/29/08 11:14 AM

The Sub-Prime Mortgage Problem will Transfer Over to Consumer Credit Card Company Write-Offs Over the Next 1 to 2 Years.

Replies: 2 | Reply | Permalink

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Recs 0 (AXP) davethewav9 (< 20) Submitted: 7/17/08 6:24 PM : Start Price: $41.97 AXP Score: 0.68 Hugh cash flow machine. Could easily absorb even 15% default of outstanding loands and not have a loss. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (AXP) jmlbmw (< 20) Submitted: 7/17/08 5:51 PM : Start Price: $41.97 AXP Score: -0.68 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. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (AXP) diverjdp (< 20) Submitted: 7/17/08 3:17 PM : Start Price: $42.07 AXP Score: 0.02 Although I missed it I think the bottom was set on this stock and it should do well from here. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (AXP) Katacus (< 20) Submitted: 7/16/08 5:49 PM : Start Price: $40.50 AXP Score: 3.49 Low PE vs. Industry. Great brand name and their customers are loyal. AXP will recover nicely;) Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out. Recs 0 (AXP) kbhermosa (< 20) Submitted: 7/15/08 8:22 PM : Start Price: $37.53 AXP Score: 8.88 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. Report this Post Replies: 0 \| Reply \| Permalink Oops! There appears to be a problem with your comment. Check to see if there's something you left out.
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Wall Street

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Top Pick	Player Name	Player Rating	Start Date	Call	Time Frame	Start Price	Stock Gain	S&P Gain	Score	Pitch
	TrackFBR	90.59	07/16/08		NS	$37.53	+12.42%	+3.54%	-8.88
	TrackFoxPitt	< 20	07/14/08		NS	$38.16	+10.56%	+1.76%	+8.80
	TrackHAndW	< 20	06/16/08 06/16/08		1Y	$44.18	-4.50%	-7.52%	+3.02
	TrackChrisDavis	35.17	06/03/08 06/03/08		1Y	$45.14	-6.54%	-9.51%	+2.97
	TrackBrandes	< 20	05/30/08 05/30/08		1Y	$46.65	-9.56%	-10.12%	+0.56
	TrackGaryBSmith	57.58	05/02/08 05/02/08		3W	$50.18	-15.93%	-10.93%	-5.00
	TrackTomGayner	< 20	04/10/08 04/10/08		NS	$45.31	-6.89%	-7.42%	+0.52
	TrackBobOlstein	< 20	03/14/08 03/14/08		5Y	$40.68	+3.72%	-2.75%	+6.47
	TrackTobinSmith	< 20	12/07/07 12/07/07		1Y	$56.30	-25.05%	-16.47%	-8.59
	TrackJohnKeeley	95.04	09/30/07 09/30/07		NS	$58.54	-27.93%	-17.39%	-10.54
	TrackBuffett	62.55	09/30/07 09/30/07		NS	$58.54	-27.93%	-17.39%	-10.54
	TrackEveillard	89.89	09/30/07 09/30/07		NS	$58.54	-27.93%	-17.39%	-10.54
	TrackRonBaron	23.64	09/30/07 09/30/07		NS	$58.54	-27.93%	-17.39%	-10.54
	TrackDodgeCox	98.58	09/30/07 09/30/07		NS	$58.54	-27.93%	-17.39%	-10.54
	TrackWWeitz	< 20	09/30/07 09/30/07		NS	$58.54	-27.93%	-17.39%	-10.54
	TrackMichaelSivy	87.29	03/20/07 03/20/07		1Y	$55.24	-23.61%	-10.58%	-13.04
	TrackPatDorsey	72.71	01/27/07 01/27/07		5Y	$56.90	-25.86%	-11.31%	-14.54
	TrackCalyonSec	95.12	10/24/06 10/24/06		NS	$55.57	-24.08%	-8.18%	-15.90
	TrackPiperJaff	74.40	10/10/06