Two Harbors Investments (NYSE:TWO) Sets New 12-Month Low - Here's Why

Key Points

• Two Harbors Investments hit a new 52-week low of $8.78 on Monday and last traded at $8.90 on volume of about 697,964 shares.
• Analyst sentiment has turned cautious — the stock carries a consensus rating of "Reduce" with an average price target of $12.88 after several downgrades from firms including Zacks, UBS and JPMorgan.
• The firm missed quarterly EPS expectations (reported $0.26 vs. $0.30 estimate), shows a negative net margin, pays a hefty annualized dividend yield of 15.1%, and insiders sold roughly 129,389 shares in the past 90 days.

Two Harbors Investments Corp (NYSE:TWO - Get Free Report)'s share price hit a new 52-week low during trading on Monday . The company traded as low as $8.78 and last traded at $8.90, with a volume of 697964 shares trading hands. The stock had previously closed at $9.26.

Analyst Upgrades and Downgrades

A number of research firms have issued reports on TWO. Zacks Research downgraded Two Harbors Investments from a "hold" rating to a "strong sell" rating in a research note on Tuesday, January 27th. JPMorgan Chase & Co. lowered their target price on Two Harbors Investments from $13.50 to $12.50 and set a "neutral" rating for the company in a research report on Wednesday, February 4th. UBS Group lowered shares of Two Harbors Investments from a "buy" rating to a "neutral" rating and raised their target price for the company from $11.00 to $14.00 in a report on Friday, January 23rd. Weiss Ratings reaffirmed a "sell (d)" rating on shares of Two Harbors Investments in a research note on Monday, December 29th. Finally, Maxim Group lowered shares of Two Harbors Investments from a "buy" rating to a "hold" rating in a research report on Thursday, December 18th. Six investment analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the stock currently has a consensus rating of "Reduce" and an average price target of $12.88.

Two Harbors Investments Stock Performance

The firm has a market capitalization of $948.51 million, a PE ratio of -1.85 and a beta of 1.18. The business has a 50-day simple moving average of $11.51 and a 200-day simple moving average of $10.52. 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 announced its earnings results on Monday, February 2nd. The real estate investment trust reported $0.26 EPS for the quarter, missing analysts' consensus estimates of $0.30 by ($0.04). Two Harbors Investments had a positive return on equity of 12.00% and a negative net margin of 109.90%.The company had revenue of $182.18 million during the quarter, compared to analysts' expectations of ($15.44) million. Equities research analysts expect that Two Harbors Investments Corp will post 0.81 earnings per share for the current fiscal year.

Two Harbors Investments Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, January 29th. Stockholders of record on Monday, January 5th were paid a $0.34 dividend. The ex-dividend date of this dividend was Monday, January 5th. This represents a $1.36 annualized dividend and a dividend yield of 15.1%. Two Harbors Investments's dividend payout ratio is currently -27.81%.

Insider Transactions at Two Harbors Investments

In related news, CIO Nicholas Letica sold 55,488 shares of Two Harbors Investments stock in a transaction dated Friday, December 19th. The shares were sold at an average price of $11.42, for a total transaction of $633,672.96. Following the completion of the transaction, the executive directly owned 166,507 shares of the company's stock, valued at approximately $1,901,509.94. The trade was a 25.00% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Alecia Hanson sold 10,768 shares of the stock in a transaction dated Friday, December 19th. The stock was sold at an average price of $11.41, for a total transaction of $122,862.88. Following the completion of the sale, the insider directly owned 45,288 shares in the company, valued at $516,736.08. This trade represents a 19.21% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 129,389 shares of company stock worth $1,483,046. 0.61% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Two Harbors Investments

Several hedge funds and other institutional investors have recently modified their holdings of the business. Millennium Management LLC boosted its holdings in Two Harbors Investments by 45.3% during the 3rd quarter. Millennium Management LLC now owns 4,535,534 shares of the real estate investment trust's stock valued at $44,766,000 after acquiring an additional 1,415,062 shares during the period. Balyasny Asset Management L.P. lifted its position in shares of Two Harbors Investments by 490.7% during the second quarter. Balyasny Asset Management L.P. now owns 3,583,939 shares of the real estate investment trust's stock worth $38,599,000 after purchasing an additional 2,977,196 shares during the last quarter. Invesco Ltd. lifted its position in shares of Two Harbors Investments by 44.5% during the second quarter. Invesco Ltd. now owns 2,649,977 shares of the real estate investment trust's stock worth $28,540,000 after purchasing an additional 815,931 shares during the last quarter. Geode Capital Management LLC boosted its stake in shares of Two Harbors Investments by 0.9% during the fourth quarter. Geode Capital Management LLC now owns 2,485,048 shares of the real estate investment trust's stock valued at $26,098,000 after purchasing an additional 21,212 shares during the period. Finally, Marshall Wace LLP purchased a new stake in shares of Two Harbors Investments during the fourth quarter valued at $23,886,000. 64.19% of the stock is currently owned by hedge funds and other institutional investors.

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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