Two Harbors Investments (NYSE:TWO) Sees Strong Trading Volume - Should You Buy?

Key Points

• Unusually-high trading volume: About 5.40 million shares traded (up ~42% from the prior session) and the stock was last around $11.17, below the prior close of $11.40.
• Analyst sentiment is negative-to-neutral: The consensus is weighted toward a "Reduce" rating with an average target of $12.88 after several recent downgrades, with most analysts at Hold and some at Sell.
• High yield but profitability concerns: Two Harbors announced a $0.34 quarterly dividend (annualized $1.36, ~12.2% yield) while reporting a quarterly EPS miss ($0.26 vs. $0.30) and showing a negative net margin (-109.9%) and negative PE, signaling elevated risk despite the yield.

Two Harbors Investments Corp (NYSE:TWO - Get Free Report) saw unusually-high trading volume on Friday . Approximately 5,399,042 shares were traded during mid-day trading, an increase of 42% from the previous session's volume of 3,798,939 shares.The stock last traded at $11.1650 and had previously closed at $11.40.

Analysts Set New Price Targets

TWO has been the subject of a number of recent research reports. Compass Point reiterated a "neutral" rating on shares of Two Harbors Investments in a research report on Friday. UBS Group lowered shares of Two Harbors Investments from a "buy" rating to a "neutral" rating and upped their target price for the company from $11.00 to $14.00 in a report on Friday, January 23rd. Zacks Research cut shares of Two Harbors Investments from a "hold" rating to a "strong sell" rating in a research note on Tuesday, January 27th. Weiss Ratings reissued a "sell (d)" rating on shares of Two Harbors Investments in a research report on Monday, December 29th. Finally, Maxim Group downgraded shares of Two Harbors Investments from a "buy" rating to a "hold" rating in a research note on Thursday, December 18th. Seven analysts have rated the stock with a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat.com, Two Harbors Investments has an average rating of "Reduce" and an average target price of $12.88.

Two Harbors Investments Stock Performance

The firm has a market cap of $1.17 billion, a PE ratio of -2.29 and a beta of 1.18. The stock has a 50-day moving average price of $11.17 and a 200 day moving average price of $10.53. The company has a debt-to-equity ratio of 1.09, a current ratio of 1.09 and a quick ratio of 1.09.

Two Harbors Investments (NYSE:TWO - Get Free Report) last released its earnings results on Monday, February 2nd. The real estate investment trust reported $0.26 earnings per share for the quarter, missing the consensus estimate of $0.30 by ($0.04). The business had revenue of $182.18 million for the quarter, compared to analysts' expectations of ($15.44) million. Two Harbors Investments had a positive return on equity of 12.00% and a negative net margin of 109.90%. Research analysts forecast that Two Harbors Investments Corp will post 0.81 earnings per share for the current year.

Two Harbors Investments Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, April 15th. Investors of record on Thursday, April 2nd will be issued a $0.34 dividend. This represents a $1.36 dividend on an annualized basis and a yield of 12.2%. The ex-dividend date is Thursday, April 2nd. Two Harbors Investments's payout ratio is presently -27.81%.

Hedge Funds Weigh In On Two Harbors Investments

A number of large investors have recently bought and sold shares of the stock. Clayton Partners LLC purchased a new position in shares of Two Harbors Investments in the 3rd quarter worth about $1,234,000. Pekin Hardy Strauss Inc. purchased a new stake in shares of Two Harbors Investments during the 3rd quarter worth about $5,325,000. Simplicity Wealth LLC purchased a new stake in shares of Two Harbors Investments during the 3rd quarter worth about $954,000. Algebris UK Ltd. acquired a new stake in Two Harbors Investments during the 3rd quarter worth approximately $17,558,000. Finally, Inceptionr LLC acquired a new stake in Two Harbors Investments during the 2nd quarter worth approximately $228,000. Hedge funds and other institutional investors own 64.19% of the company's stock.

About Two Harbors Investments

Two Harbors Investments Corp. is a mortgage real estate investment trust (mREIT) that primarily invests in residential mortgage-backed securities (RMBS) issued or guaranteed by government-sponsored enterprises, as well as non-agency residential mortgage loans, mortgage servicing rights and credit risk transfer securities. The company seeks to generate attractive risk-adjusted returns for its shareholders by employing leverage to enhance net interest income derived from its portfolio of high-quality fixed-income assets.

Headquartered in Minneapolis, Minnesota, Two Harbors operates through a self-managed platform that combines portfolio management, risk-management and securitization expertise.

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