IndyMac Bancorp Inc. got some welcome news Tuesday when shares of the beleaguered lender surged more than 17 percent after it was upgraded by a Roth Capital Partners analyst.
Analyst Richard Eckert upgraded the Pasadena-based lender to a "hold" rating from a "sell" rating.
The upgrade came after IndyMac's Chief Executive Michael Perry said late last week that the markets for mortgage securities are "panicked and illiquid" and the stock slumped. IndyMac specializes in so called Alt-A mortgage loans, which are above subprime loans but below prime loans.
The Roth analyst, Richard Eckert, said that IndyMac stock looks more attractive now that the price is lower. Although IndyMac still faces risks, he wrote that "we find it difficult to imagine a scenario wherein the company would report sustained losses."
After the upgrade, shares gained 17.4 percent, or $3.40, to $22.93 in afternoon trading Tuesday on the New York Stock Exchange. Shares in IndyMac have been beaten up this year, dropping more than 50 percent.
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