Ahead of the Bell: Thornburg Mortgage

Two more analysts upgraded Thornburg Mortgage Inc. on Thursday, as the home lender appears to have averted the worst of the mortgage crisis.
After the Wall Street banks that finance the mortgage industry pulled most of their money out earlier this year, hundreds of cash-starved mortgage lenders scrambled to raise money. This led to a lot of sellers and few buyers for mortgage investments, pulling down prices.

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In this environment, Thornburg Mortgage sold $20.5 billion of its safest investments. The company sold a $575 million stake in itself through an auction of a special class of stock, and borrowed money against a $1.44 billion pool of home loans.

While analysts say these deals did not come cheap, they show that Thornburg was able to do something a lot of other lenders could not: raise cash.

Deutsche Bank analyst Stephen Laws upgraded Thornburg Mortgage to "Hold" from "Sell." He said much of the risk of Thornburg running out of cash has been reduced. He raised his price target to $12.50 from $10. The new price target represents the net value of the company's assets.

A Piper Jaffray analyst also upgraded Thornburg Mortgage, to "Market Perform."

These upgrades bring the number of analysts who have raised their ratings on Thornburg this month to six.

Shares of Thornburg Mortgage closed Wednesday at $13.34, down 46.9 percent for the year.
NEW YORK (AP)