Through The Fly's Eyes: AES Corp.

from Theflyonthewall.com








Use Price Weakness To Buy Stock

AES Corp. (AES), the international power generator operator, reported results that did not surprise to the upside. The stock was down close to 2% in yesterday's trading and is down 13% for the month. Use this price weakness to get into this stock.

Free cash flow was $377M versus $309M prior to capital expenditure for new projects, up 22%. Revenue grew 11% which included 2% for positive currency impacts, or 9% adjusted revenue growth. The forecast free cash flow yield pre-growth cap-ex is currently 10% and is expected to rise to 15% in 2009 and 18% in 2011. This is the highest level in the Power group, according to Lehman Brothers.

In yesterday's conference call, most investors questions focused on its Latin American business, which appeared not to please investors. However, the global aspect of its business and the need for power generation in many of the world's emerging markets makes this a high quality stock to own.

Use June's price weakness to buy this stock.