Compass Point Starts Western Asset Mortgage Capital (WMC) at Buy; Macro Environment Supportive of Levered Mortgage Investing

July 31, 2012 7:49 AM EDT
Get Alerts WMC Hot Sheet
Price: $10.00 --0%

Rating Summary:
    2 Buy, 7 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Compass Point initiates coverage on Western Asset Mortgage Capital (NYSE: WMC) with a Buy. PT $21.00.

Analyst, Jason Stewart, said, "We remain generally positive on levered mortgage investing based on a few key macro premises. In the Agency mREIT space, WMC is somewhat unique as it has built a diverse portfolio capable of mitigating near term prepayment risks (our expectation is for broad based increases in Agency prepayment rates over the next several months), the dividend is growing and the stock still trades at only a modest premium to book value. Based on the company's recent dividend announcement, we believe portfolio returns are tracking slightly ahead of our modeled expectations."

Note - WMC is a newly formed mREIT externally managed by Western Asset Management Company, a subsidiary of Legg Mason (NYSE: LM).

For an analyst ratings summary and ratings history on Western Asset Mortgage Capital click here. For more ratings news on Western Asset Mortgage Capital click here.

Shares of Western Asset Mortgage Capital closed at $20.14 yesterday.

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