Jefferies Maintains a 'Hold' on Hatteras Financial (HTS); Book Value Growth and Tame CPRs Result in a Solid 4Q11
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Price: $16.29 --0%
Rating Summary:
4 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
4 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies maintains a 'Hold' on Hatteras Financial (NYSE: HTS) price target raised $1 to $28.
Analyst, Daniel Furtado, said, "HTS reported EPS of $0.92, $0.01 ahead of the Street and $0.01 below our estimate. Despite an 8bps Q/Q decline in average net asset spread from 1.64% to 1.56%, book value grew roughly 3% from $26.32 in 3Q11 to $27.08 in 4Q11." (Jefferies lowers FY12 EPS estimate from $3.73 to $3.70)
"Management believes low rate environments tend to provide incentive for companies to increase leverage to maximize returns while taking on incremental interest rate risk. To this point, HTS is comfortable with a sub-8.0x levered book as they believe this range gives them a solid liquidity cushion. Additionally, during 2012 management intends to extend their swap durations out to 2016/2017. With this conservative management strategy, it is clear that HTS' primary goal is to protect book value as CPR volatility and economic uncertainty continue to overhang the market."
For an analyst ratings summary and ratings history on Hatteras Financial click here. For more ratings news on Hatteras Financial click here.
Shares of Hatteras Financial closed at $28.15 yesterday.
Analyst, Daniel Furtado, said, "HTS reported EPS of $0.92, $0.01 ahead of the Street and $0.01 below our estimate. Despite an 8bps Q/Q decline in average net asset spread from 1.64% to 1.56%, book value grew roughly 3% from $26.32 in 3Q11 to $27.08 in 4Q11." (Jefferies lowers FY12 EPS estimate from $3.73 to $3.70)
"Management believes low rate environments tend to provide incentive for companies to increase leverage to maximize returns while taking on incremental interest rate risk. To this point, HTS is comfortable with a sub-8.0x levered book as they believe this range gives them a solid liquidity cushion. Additionally, during 2012 management intends to extend their swap durations out to 2016/2017. With this conservative management strategy, it is clear that HTS' primary goal is to protect book value as CPR volatility and economic uncertainty continue to overhang the market."
For an analyst ratings summary and ratings history on Hatteras Financial click here. For more ratings news on Hatteras Financial click here.
Shares of Hatteras Financial closed at $28.15 yesterday.
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