Two Harbors Investments (NYSE:TWO) Hits New 1-Year Low - What's Next?

Key Points

• Two Harbors Investments has reached a new 12-month low, with shares trading as low as $9.75 on the day of the report.
• Analysts have recently downgraded their price targets for the stock, with UBS lowering it from $13.00 to $12.00, indicating a generally cautious outlook.
• The company's latest earnings report showed an EPS of $0.28, meeting expectations, but it recorded a significant negative net margin of 67.06%.

Two Harbors Investments Corp (NYSE:TWO - Get Free Report) shares reached a new 52-week low during trading on Thursday . The company traded as low as $9.75 and last traded at $9.81, with a volume of 1576767 shares changing hands. The stock had previously closed at $9.94.

Wall Street Analysts Forecast Growth

A number of analysts recently commented on the company. Keefe, Bruyette & Woods increased their price objective on Two Harbors Investments from $12.95 to $13.25 and gave the company a "market perform" rating in a research note on Wednesday, April 30th. Citizens Jmp reissued a "market perform" rating on shares of Two Harbors Investments in a research note on Thursday, July 3rd. Wall Street Zen lowered Two Harbors Investments from a "hold" rating to a "sell" rating in a research note on Wednesday, April 30th. Maxim Group decreased their price target on Two Harbors Investments from $15.00 to $12.00 and set a "buy" rating on the stock in a research note on Tuesday, July 29th. Finally, JPMorgan Chase & Co. decreased their price target on Two Harbors Investments from $12.50 to $10.50 and set a "neutral" rating on the stock in a research note on Wednesday, April 16th. One investment analyst has rated the stock with a sell rating, five have assigned a hold rating and four have issued a buy rating to the stock. According to data from MarketBeat.com, Two Harbors Investments presently has a consensus rating of "Hold" and an average target price of $12.88.

Two Harbors Investments Trading Up 0.4%

The business has a 50 day simple moving average of $10.50 and a 200-day simple moving average of $11.81. The stock has a market capitalization of $1.02 billion, a price-to-earnings ratio of -2.76 and a beta of 1.25. The company has a current ratio of 1.07, a quick ratio of 1.07 and a debt-to-equity ratio of 1.08.

Two Harbors Investments (NYSE:TWO - Get Free Report) last released its quarterly earnings data on Monday, July 28th. The real estate investment trust reported $0.28 EPS for the quarter, hitting analysts' consensus estimates of $0.28. The company had revenue of ($18.12) million for the quarter, compared to the consensus estimate of ($23.29) million. Two Harbors Investments had a positive return on equity of 9.39% and a negative net margin of 67.06%. On average, equities analysts predict that Two Harbors Investments Corp will post 0.81 earnings per share for the current year.

Two Harbors Investments Cuts Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, July 29th. Stockholders of record on Thursday, July 3rd were issued a $0.39 dividend. This represents a $1.56 dividend on an annualized basis and a dividend yield of 15.9%. The ex-dividend date was Thursday, July 3rd. Two Harbors Investments's dividend payout ratio (DPR) is -43.82%.

Hedge Funds Weigh In On Two Harbors Investments

A number of large investors have recently modified their holdings of TWO. CWM LLC raised its holdings in shares of Two Harbors Investments by 68.4% during the 1st quarter. CWM LLC now owns 2,192 shares of the real estate investment trust's stock valued at $29,000 after buying an additional 890 shares during the period. Montag A & Associates Inc. raised its holdings in shares of Two Harbors Investments by 29.2% during the 1st quarter. Montag A & Associates Inc. now owns 5,285 shares of the real estate investment trust's stock valued at $71,000 after buying an additional 1,193 shares during the period. Motiv8 Investments LLC raised its holdings in shares of Two Harbors Investments by 10.9% during the 1st quarter. Motiv8 Investments LLC now owns 12,142 shares of the real estate investment trust's stock valued at $162,000 after buying an additional 1,194 shares during the period. Triumph Capital Management raised its holdings in shares of Two Harbors Investments by 6.0% during the 2nd quarter. Triumph Capital Management now owns 26,725 shares of the real estate investment trust's stock valued at $288,000 after buying an additional 1,512 shares during the period. Finally, Golden State Equity Partners raised its holdings in shares of Two Harbors Investments by 2.0% during the 2nd quarter. Golden State Equity Partners now owns 84,941 shares of the real estate investment trust's stock valued at $915,000 after buying an additional 1,665 shares during the period. 64.19% of the stock is currently owned by hedge funds and other institutional investors.

About Two Harbors Investments

Two Harbors Investment Corp. invests in, finances, and manages mortgage servicing rights (MSRs), agency residential mortgage-backed securities (RMBS), and other financial assets through RoundPoint in the United States. The company target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, hybrid mortgage loans, or derivatives; and other assets, such as financial and mortgage-related assets, including non-agency securities and non-hedging transactions.