UPDATE: Wunderlich Securities Upgrades CYS Investments on Valuation and Dividends

In a report published Monday, Wunderlich Securities analyst Merrill Ross upgraded the rating on CYS Investments CYS from Hold to Buy, and reiterated the $12.00 price target.

In the report, Wunderlich Securities noted, “We are upgrading the shares of CYS Investments (CYS) from Hold to Buy, because we think that the market incorrectly assumed the 2Q13 dividend increase represented an increase in operating leverage. Although 2Q13 results are yet to be reported, we believe that CYS' leverage may have held steady or declined in the quarter, and that the dividend increase was prompted by an increase in drop income. We believe CYS is conservatively balancing risk and reward, and taking advantage of market dislocations caused by QE3 to create value for shareholders. Maintain $12 target.”

CYS Investments closed on Friday at $10.54.