UPDATE: Wunderlich Securities Raises Target to $30 on Hatteras Financial
Wunderlich Securities increases its target price $2 to $30 on Buy-rated Hatteras Financial (NYSE: HTS) as the company's timely capital raises improves earning potential.
Wunderlich Securities says, "Hatteras Financial (HTS) took advantage of a back-up in rates that sent RMBS prices lower, at least momentarily, and raised about $540 million (assuming the overallotment option) of new common equity. Timing is everything, and we believe the company will be able to add assets consistent with its strategy at spreads of 175 bps. HTS's short-duration strategy created nearly 25% in value for shareholders in 2011. By that measure, HTS turned in a best-in-class performance in 2011, despite the dividend cut in 4Q11. We believe the portfolio expansion funded by this capital raise will support higher earnings."
HTS closed at $27.37 a share on Tuesday.
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