American Story

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AXP -- USA Stock  

USD 120.59  0.01  0.0083%

It appears that American Express will continue to recover much faster as its share price surged up 3.31% today. American Express's current daily volatility is 1.74 percent, with a beta of 0.33 and an alpha of 0.05 over DOW. As many investors are getting excited about dividend beast, it is fair to recap American Express. We will evaluate why recent American Express price moves suggest a bounce in November.
Published over a month ago
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Is American Express (NYSE:AXP) way too risky for millennials?
American Express has roughly 41.7 B in cash with 2.07 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 51.79. This firm has 50.55 B in debt with debt to equity (D/E) ratio of 2.4, meaning that the entity heavily relies on borrowing funds for operations. The company has a current ratio of 1.54, which is typical for the industry and considered as normal.
Investing in American Express, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding American Express along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.

How important is American Express's Liquidity

American Express financial leverage refers to using borrowed capital as a funding source to finance American Express ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. American Express financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between American Express's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for American Express, but it might be worth checking our own buy vs. sell analysis

American Express Correlation with Peers

Investors in American can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in American Express. Diversification will allow for the same portfolio return with reduced risk. The correlation table of American Express and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities American is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of American for more details

Breaking down the case for American Express

We consider American Express very steady. American Express secures Sharpe Ratio (or Efficiency) of 0.061, which signifies that the company had 0.061% of return per unit of standard deviation over the last month. Our philosophy in foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for American Express, which you can use to evaluate future volatility of the firm. Please confirm American Express mean deviation of 1.29, and Risk Adjusted Performance of 0.0579 to double-check if the risk estimate we provide is consistent with the expected return of 0.11%.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Another 3 percent roll up for American Express

The downside deviation is down to 1.67 as of today. As of the 23rd of October, American Express shows the risk adjusted performance of 0.0579, and Mean Deviation of 1.29. American Express technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to collect and analyze data for nineteen technical drivers for American Express, which can be compared to its rivals. Please confirm American Express standard deviation, as well as the relationship between the maximum drawdown and expected short fall to decide if American Express is priced correctly, providing market reflects its regular price of 104.79 per share. Given that American Express has jensen alpha of 0.0512, we suggest you to validate American Express's prevailing market performance to make sure the company can sustain itself at a future point.

The Current Takeaway on American Express Investment

Although other companies under the credit services industry are still a bit expensive, American Express may offer a potential longer-term growth to insiders. While some insiders may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to American Express.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of American Express. Please refer to our Terms of Use for any information regarding our disclosure principles.

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