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In a report published Monday, Wunderlich Securities reiterated its Hold rating on American Capital Agency Corp.
AGNC, and slightly raised its price target from $34.00 to $35.00.
Wunderlich noted, “American Capital Agency (AGNC) reported a 2Q12 GAAP loss of ($0.88) per share, and net spread income of $0.94 per share. Adjusting to eliminate catch-up premium amortization, net spread income was $1.05 per share. The company raised $1.2 billion of capital (assuming the greenshoe option), which will be deployed into market spreads that are more narrow than spreads in the portfolio. Given the potential for pressure on earnings and dividend coverage as this capital is deployed, we maintain a Hold rating. We are increasing our target from $34 to $35 because we believe the relative value of even an estimated $4.50 annual dividend is appealing in a market that offers few risk-adjusted comparable yield plays.”
American Capital Agency Corp. closed on Friday at $34.83.
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