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UPDATE: Wunderlich Securities Downgrades SandRidge Mississippian Trust II to Hold on Weaker Cash Flows


Wunderlich Securities downgraded SandRidge Mississippian Trust II (NYSE: SDR) from Buy to Hold and lowered its price target from $24 to $22.

Wunderlich Securities commented, "Although the current yield remains attractive, as a term trust, the units hold less value as time passes because of the reduced distribution stream. We use a discounted cash flow model with a discount rate of 5% to value the units. Using this model, we derive a value of $22/unit for the units. We also believe the sponsor could sell some of its holding to fund its capital expenditure program, which adds risk to the trust's value and limits potential capital appreciation."

SandRidge Mississippian Trust II closed at $20.16 on Friday.

Latest Ratings for SDR

Oct 2014Raymond JamesDowngradesUnderperformMarket Perform
Aug 2014Raymond JamesDowngradesMarket PerformUnderperform
Oct 2013RBC CapitalDowngradesSector PerformUnderperform

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