AmEx Looks Strong in this Market (NYSE:AXP)

American Express

In times of market concern, you should consider company names you know and trust that are good value and have strong fundamentals, enter the American Express Company (NYSE:AXP).  This stock may be a great candidate for your portfolio or long term IRA.


Let’s talk about the value of American Express.  The price-to-earnings multiple for AmEx of 13.6 is lower than the S&P 500 average 19.1, which shines positive on AmEx.  Then, the price-to-sales multiple for AmEx (1.93) is slightly better than the S&P average (2.18) and also better than Amex’s industry peers (2.99).  This is indicative that AmEx’s sales are higher and price lower when compared to other stocks, showing there may be some value right now.

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The Q1 earnings for AmEx landed with a surprise as the beat analysts’ estimates of $0.93/share by 4 cents to come in at $0.97/share.  Looking back, we see that AmEx has made several surprises looking back into 2010: Q1 = +15.9%, Q2 = +6.3%, Q3 = +5.9%, Q4 = 4.4%.  It is usually a pretty good sign when a company is making several small surprises in earnings.  Also of worthy note is that analysts have been increasing their outlook for Q2 in 2011, raising estimates to $0.99/share from $0.97/share 60 days ago.

From a technical standpoint, AXP’s chart shows that the stock price is bouncing up from a support point at $47.  Over the past 12 months American Express Co (AXP) shares have traded between a 52-week low of $37.33 and its 52-week high of $51.97.  AXP shares are currently trading at $49.66, up 1.6% and $0.78 with today's volume currently at 1.56M shares traded.  Share price just made a bullish crossover as it went above the 50-day moving average.  Also, the 50-day moving average price remains solidly above the 200-day moving average.


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