The Long Case for American Express

Over the last couple of weeks, American Express (AXP) has become a favored whipping boy of the financial shorts, who point to the company’s recent bad quarter and exposure to consumer credit as reasons the stock will continue to decline. While the idea that Amex will continue to face problems isn’t wrong on the face of it, what a lot of people are missing is the fact that Amex is still outperforming the other credit card companies - and it took a year for the problems facing the rest of the credit card industry to catch up with Amex.

This, along with several other reasons, is why I think Amex will recover faster than its competitors once the economy picks up.