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Convertible pfd with 8+% and more upside than down. (AES-C)

AES (AES Corporation) owns electricity generation and distribution businesses on five continents in 29 countries. AES generates approximately 43,000 megawatts (MW) and more than 3,000 MW under construction in 10 countries.

AES is not dependent on a single nation, geographic area or currency.

Forward estimated PE is less than 10. AES is selling at less than 50% revenues. (Currently $23 per share.) AES’s current ratio is above 1.5. AES has consistent revenue growth (even in the current miserable worldwide economic environment) and has the ability to easily fund growth without stress.
AES’s infrastructure (plants, equipment, etc.) has a replacement value far in excess of the current MV (market value) of the shares. Whereas, there is no current intention to sell off parts of AES, the parts are worth many times more than the whole. The “takeout” value is more than 25 in today’s depressed markets.
Near and long term outlook is for demand for AES’s eclectic output and other services to continue and increase. The common shares should prosper over time. Consensus, near term (1-2) price target is 20+.
The common shares have upside potential, but the market outlook is questionable at best. You will benefit ONLY if the shares go up.
As usual, I can accurately predict the following: The shares will go up. (and/or) The shares will go down. (and/or) The shares will remain the same. (and/or all the above)
The common shares pay no dividend. The only reward for owning AES is if it goes up. The 6.75% AES convertible preferred (AES-C) pays $3.376. At a price of under $40, that is better than an 8% return. If the stock goes nowhere, 8% is good. If AES goes down (not too much), the 8% can still make AES-C profitable.
AES-C is callable at $50. At the option of the buyer, it can be converted into 1.42 shares of AES. 
A likely scenario is AES may decide to issue another convertible preferred with a lower coupon or do some other financing and use the proceeds to buy the outstanding AES-C at a discount. This would make a lot of sense and push the shares to the redemption price ($50).
Another scenario is AES will divest parts, be a “take-over” target, merge or privatize. All will help push AES-C up.
Bottom line: AES-C looks like a good idea in the current market environment. It is OK to buy with a trailing 10% stop. Do not pay more than $40.
Warning! AES-C is thinly traded. Use limit orders. Open buy orders can take advantage of a sharp interim drops. Stop orders should have limits.
Disclosure: I and associates own AES, AES-C and long term (2011) synthetic option longs.