American Express (NYSE:AXP) just reported a so-so second quarter. By anyone else's standards and considering the tough industry environment, the results would be pretty great -- but for a company of AmEx's caliber, sometimes expectations are too high, and good just doesn't cut it. However, I highly advise Fools to keep watchful eye on AmEx's stock price, because shares at 16 times forward earnings look very reasonably valued.

In the second quarter, AmEx grew net revenues and income from continuing operations at 9% each. Because the company is a steady repurchaser of its own shares, diluted earnings per share increased 13%. The trailing-12-month return on equity was a stellar 37.5%.

Two main things kept AmEx's results in check. The normalization of bankruptcy filings, as expected, resulted in higher credit losses and was a drag on securitization income. Interest expenses also crept up, again as expected, as lower-cost fixed-rate debt and hedges rolled off -- somewhat similar to how Southwest Airlines is facing higher fuel prices as its prescient oil hedges wear off.

Metrics were pretty solid across the board. Worldwide cards in force increased 10%, and spending per proprietary basic card grew 8%. The average discount rate was flat at 2.57%, and average fee per card increased $2 versus last year to $36.

The star performer of the quarter was the Global Network Services (GNS) division, where billed business increased 62%. The GNS division is where third parties such as Bank of America (NYSE:BAC) or Citigroup (NYSE:C) issue AmEx cards. Up until 2004, Visa and MasterCard (NYSE:MA) enforced rules that effectively prevented banks from issuing AmEx cards. However, once AmEx finally won its anticompetitive lawsuit, this market opened up and has been a stellar grower ever since.

In all, I think there's a lot to like in the credit card space. Capital One (NYSE:COF) is a highly accredited banking institution that is trading at a mediocre bank's multiple, while Discover (NYSE:DFS) has a lot going as well. However, at the top of my list of "shares I wish I could buy just a little bit cheaper" is American Express.

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MasterCard is a Motley Fool Inside Value recommendation. Bank of America is a Motley Fool Income Investor recommendation. Try any one of our investing services free for 30 days.

Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.