American Express (NYSE:AXP) has had a rough year to date with the stock currently trading at just over $77 a share which is almost a 18.4% drop from where it started the year. This is mainly due to the Costco fallout which has cost the credit card company millions in revenue but it has had plenty of time to prepare for this loss. The stock is oversold here when compared to the Financial Sector ETF (NYSEARCA:XLF) which is only down 8.4% year to date and the S&P500 (NYSEARCA:SPAL) which is down less than 5% (see chart). Nevertheless the credit card company is up almost 3% over the last week as a result of the Sam’s Club –owned by Wal-Mart (NYSE:WMT) — deal which will add 650 more locations in the US and Puerto Rico from the 1st of October.

Source: Americal Express stock price data by amigobulls.com

There will always be room for a credit card company that is tailored towards high net worth individuals because of the closed loop network it creates. Merchants are willing to pay the added fees to American Express because they know these affluent credit card users will spend more through their cards. Furthermore American Express is then able to fund its very generous loyalty programs from the fat fees it receives from the respective merchants.

The decline in the share price has resulted in a low current PE ratio of 13.63. I think its time to go long again. Let’s take a closer look at the fundamentals. This stock traded at $95 a share in 2014 but in my opinion, its long term fundamentals have not changed much, which is why I am bullish. This stock has always been viewed by investors as a finance anchor in a diversified portfolio whether the portfolio was set up for income growth or capital gains. Here is a breakdown of its financials over a 10 year period