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See How American Express Ranks Among Analysts' Top Dow 30 Picks

By The Online Investor Staff, Wednesday, January 15, 11:47 AM ET

A study of analyst recommendations at the major brokerages shows that American Express Co. (NYSE:AXP) is the #16 broker pick, on average, out of the 30 stocks making up the Dow Jones Industrial Average, according to ETF Channel. Despite being ranked lower than the median among analyst picks of the Dow, American Express Co. ranks better than the median among analyst picks for the broader S&P 500 index components, claiming the #223 spot out of 500.

In forming this rank, the analyst opinions from the major brokerage houses were tallied, and averaged; then, the underlying components were ranked according to those averages. Investors often interpret analyst opinions from different angles — when companies have a low rank among analysts, it isn't necessarily the case that investors should conclude that the stock will perform poorly. It can, of course, but a bullish investor could also take the contrarian angle and read into the data that there is lots of room for upside because the stock is so out of favor.

From the other direction, a popular analyst pick could mean that many sharp minds individually came to the same bullish conclusion, and therefore the stock should do well, but it could also mean that if the company stumbles, that would come as a negative surprise.

For these reasons, we at ETF Channel find value to putting together these rankings, because both the top and the bottom ends of the list can often make for some interesting stock picking ideas for further research.

Below is a chart of rank over time:

AXP operates in the Credit Services & Lending sector, among companies like Discover Financial Services (DFS) which is up about 0.3% today, and Orix Corp (IX) trading lower by about 0.5%. Below is a three month price history chart comparing the stock performance of AXP, versus DFS and IX.

AXP,DFS,IX Relative Performance Chart

AXP is currently trading up about 0.5% midday Wednesday.

Find the right mix of model portfolios today at PortfolioChannel.com


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