Increasing the Power Play (original) (raw)

Find out what's driving Cramer to add shares to his field bet.

Dear Action Alerts PLUS Subscriber,

As I mentioned last week, I'm going to buy 2,500 shares of AES (AES) . The stock has shed a buck in recent sessions, to $8.06, even though the utility's Brazilian division was able to refinance some debt last week. This purchase will give me a total of 10,000 AES shares.

I also want to buy 1,000 shares of El Paso (EP) here around $6.57. The company sold a business last week and its California settlement was finalized late Friday. After a wild ride the past couple of weeks, I think El Paso has stabilized and is set to move higher.

Speaking of the Power Play field bet, Dynegy (DYN) said over the weekend that it had entered in talks with Ameren (AEE) to sell its Illinois Power assets. This is the same business that Dynegy had all but sold to Exelon (EXC) . The deal folded last month when state legislators didn't pass a bill that would have made the deal financially attractive. This time around, Ameren said it doesn't require special-interest benefits to make the deal a reality.

At the end of the day, I really don't care who buys Illinois Power. Dynegy's near-term liquidity is sufficient, but the sale would allow the company to retire another $400 million of debt.

Regards,

James J. Cramer

DISCLOSURE: At the time of publication, Cramer was long AES, El Paso and Dynegy.