Many stocks have been testing new highs in 2020, and one of the most notable is Two Harbors Investment Corp. (TWO). Currently, TWO is trading at $5.86 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $6.07.
To add more color to this target, the company’s high over the last year is $15.85 and the low is $2.25. Over the last 52 weeks, TWO is down -63.03% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, TWO reported a profit of $205.25 million. Two Harbors Investment Corp. also saw revenues increase to $255.51 million. In addition, TWO has free cash flow of $100.21 million as of 03-2020 The company’s EBITDA came in at $247.2 million which compares well with its peers.
TWO Return on Equity (ROE) is -46.10%, and its Return on Assets is -5.10%. All told, it is clear that, TWO needs to be on your watchlist.
About Two Harbors Investment Corp.
If readers are unfamiliar, Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), non-agency securities, mortgage servicing rights, and other financial assets in the United States. Its target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, and hybrid adjustable-rate mortgage (ARMs); non-agency securities collateralized by residential mortgage loans; and other assets, such as financial and mortgage-related assets, as well as residential mortgage loans and non-hedging transactions. The company qualifies as a REIT for federal income tax purposes. As a REIT, the Company must distribute at least 90% of annual taxable income to its stockholders. Two Harbors Investment Corp. was incorporated in 2009 and is headquartered in New York, New York.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. TWO has a short ratio of 1.18 and outstanding shares of 273.39M.
TWO has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 9.0 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -5.90. Investors should also keep an eye on sector updates as TWO has historically followed its peers on positive news.
All told, Two Harbors Investment Corp. TWO has strung together solid data and demonstrated underlying fundamentals. At its current valuation, TWO represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Two Harbors Investment Corp. TWO is now commanding a market cap of 1.59B and a float of 270.95M. TWO is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of TWO stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in TWO, either long or short, and we have not been compensated for this article.