Deutsche Bank Starts American Capital Mortgage (MTGE) at Buy; Expect Attractive Returns From Hybrid RMBS Portfolio

Deutsche Bank initiates coverage on American Capital Mortgage (NASDAQ: MTGE) with a Buy. PT $22.00.

Deutsche analyst says, "We expect MTGE's portfolio to consist primarily of agency RMBS for the remainder of 2011 with the mix of non-agency RMBS and other assets increasing in 2012. Our target of $22 is based on applying a 10% premium to our estimated book value of $19.87 per share. Given our portfolio return expectations, the attractive operating environment (low financing costs and steep yield curve), and the attractive valuation (shares currently trading below book value), we are initiating coverage with a Buy."

For more ratings news on American Capital Mortgage click here and for the rating history of American Capital Mortgage click here.

Shares of American Capital Mortgage closed at $17.09 yesterday.

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