Growth is Good

Roth raises share price for Impac
By MortgageDaily.com staff
1/21/2005

More assets than expected is good, according to one investment banking analyst that upgraded its outlook for shares of an Alt-A REIT.

Roth Capital Partners reported it raised its ratings on shares of Impac Mortgage Holdings to "strong buy" from "buy" as a result of Impac's total assets for the December quarter exceeding its projections by $0.7 billion. Impac reportedly ended the period with total assets of $23.5 billion and mortgage assets of $22.9 billion.

The higher-than-expected outcome prompted Roth to raise its estimates of the Alt-A and warehouse lender's 2004 year-end total and mortgage assets by 6% and 7%, respectively.

"Because of the higher levels of total assets and mortgage assets we are now expecting going into 2005, we have boosted projected balances of both in our earnings model throughout 2005 and 2006," Roth said. For 2005, it now anticipates average and year-end balances of total assets of $26.8 billion and $30.0 billion, respectively, both up 8% from previous projections. For 2006, it raised average and year-end balances of mortgage assets 8% from its previous projections to $32.2 billion and $34.5 billion.

Roth Capital set the target price at $28, with price appreciation potential of 29%. The projected dividend of $3.20 over the next four quarters would provide a yield of 15% at current prices, bringing the total return potential over the next 12 months to 44%.

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