Real Client Managed Portfolio Memorandum

ANALYST: Alexander Ring

SUBJECT: Ameren Corp Investment Recommendation

DATE: April 25, 2006

Recommendation: Buy

I am recommending that RCMP purchase 400 shares of Ameren Corp. (AEE) at the market for an approximate cost of $21,200. Ameren Corp. is a regulated public utility holding company with electric and natural gas operations in the Illinois and Missouri. The addition of this company to our portfolio will add a significant amount of diversification as well as provide a relatively safe asset to the portfolio that will generate cash flows from its generous 5.1% dividend yield. As of April 24, 2006, shares of AEE traded at $50.60 on the New York Stock Exchange (NYSE). Upon purchase of the shares, Ameren would represent 6.4% of the total market value of the RCMP portfolio.

Discounted Cash Flow (DCF) analysis provides an intrinsic value price range of $58 - $71 per share, or 28% higher than the current market price, taken at the midpoint of the given range. Forecasts were based on conservative estimates which add to the confidence of the price range specified above. A slightly negative stock price performance in 2005 resulted from a number of issues affecting the company. These include the costs of integrating the Illinois Power acquisition into the company, as well as increased costs related to disruptions in coal supply provided by rail. This presents an excellent opportunity, in my opinion, to purchase a solid company at a relatively undervalued price.

Current Information

86% of electricity generated was from coal, with nuclear and natural gas coming in a distant second and third with 10% and 1% contributions, respectively.

Return on Assets (ROA) 3.3%

Return on Equity (ROE) 9.5%

2005 Earnings per Share $3.13

Price/Earnings Ratio 16

Pros:

·  Valued at a discount to the market and to peers

·  Holds up well to DCF analysis with conservative estimates

·  Excellent dividend yield of 5.1% versus S&P yield of 1.8%

Cons:

·  Susceptible to changes in the regulatory environment

·  Could see slightly lower demand with energy prices on the rise