UPDATE: Wunderlich Securities Reiterates Buy Rating, Raises PT on American Capital Mortgage Investment Corp. Following Portfolio Diversification

In a report published Friday, Wunderlich Securities analyst Merrill Ross reiterated a Buy rating on

, and raised the price target from $21.50 to $22.50. In the report, Wunderlich Securities noted, “American Capital Mortgage (MTGE) reported $0.72 of dollar roll plus net spread income, in-line with our estimate. While we are lowering our 2014 earnings estimate, we think that MTGE's allocation of equity to agency MBS, non-agency MBS and mortgage servicing will prove capable of driving YoY earnings gains even as the FOMC engages in liftoff. Two concepts give us this confidence: MTGE has a liquid portfolio that can take advantage of mispriced assets opportunistically, and negative net supply of MBS will provide price support for its assets. BVPS increased to $22.73 and we think it will have good support in coming quarters. We are raising our target by $1 to $22.50, which is a discount to forward, market-neutral BVPS.” American Capital Mortgage Investment Corp. closed on Thursday at $19.93.