This trade activity should not be overlooked: Two Harbors Investment Corp. (TWO)

Two Harbors Investment Corp. (NYSE: TWO) stock fell -2.09% on Friday to $5.16 against a previous-day closing price of $5.27. With 2.45 million shares changed hands, the volume of the stock remained lighter than its average volume of 3.88 million shares. During the session, the REIT – Mortgage company that operates in wider Real Estate sector, reached to the highest price of $5.34 whereas the lowest price it dropped to was $5.13. The 52-week range on TWO shows that it touched its highest point at $6.81 and its lowest point at $4.26 during that stretch. It currently has a 1-year price target of $5.38. With its current market cap of 1.76 billion, TWO has annualized dividend of $0.68 while the current yield stands at 13.18%. Beta for the stock currently stands at 1.60.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TWO was down-trending over the past week, with a drop of -4.44%, but this was up by 7.95% over a month. Three-month performance dropped to 0.00% while six-month performance fell -8.51%. The stock lost -17.83% in the past year, while it has lost -10.57% so far this year. A look at the trailing 12-month EPS for TWO yields 0.40 with Next year EPS estimates of 0.76. For the next quarter, that number is 0.18. This implies an EPS growth rate of 106.90% for this year and 6.26% for next year. EPS is expected to grow by 3.33% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -25.10%.

Float and Shares Shorts:

At present, 344.00 million TWO shares are outstanding with a float of 341.66 million shares on hand for trading. On Jul 14, 2022, short shares totaled 11.34 million, which was 3.30% higher than short shares on Jun 14, 2022. In addition to Mr. William Ross Greenberg as the firm’s Pres, CEO, Chief Investment Officer & Director, Ms. Mary Kathryn Riskey serves as its VP & CFO.

Institutional Ownership:

Through their ownership of 68.49% of TWO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.48% of TWO, in contrast to 19.03% held by mutual funds. Shares owned by individuals account for 1.20%. As the largest shareholder in TWO with 16.35% of the stake, BlackRock Fund Advisors holds 56,274,231 shares worth 56,274,231. A second-largest stockholder of TWO, The Vanguard Group, Inc., holds 36,812,104 shares, controlling over 10.70% of the firm’s shares. Allspring Global Investments LLC is the third largest shareholder in TWO, holding 15,521,937 shares or 4.51% stake. With a 7.05% stake in TWO, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 24,268,434 shares are owned by the mutual fund manager. The Allspring Special Small Cap Value, which owns about 3.62% of TWO stock, is the second-largest Mutual Fund holder. It holds 12,472,696 shares valued at 62.11 million. Vanguard Total Stock Market Index holds 3.00% of the stake in TWO, owning 10,322,326 shares worth 51.41 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TWO since 9 analysts follow the stock currently. There are 2 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TWO analysts setting a high price target of $6.00 and a low target of $5.00, the average target price over the next 12 months is $5.45. Based on these targets, TWO could surge 16.28% to reach the target high and fall by -3.1% to reach the target low. Reaching the average price target will result in a growth of 5.62% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TWO will report FY 2022 earnings on 02/08/2023. Analysts have provided yearly estimates in a range of $0.83 being high and $0.44 being low. For TWO, this leads to a yearly average estimate of $0.72. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Two Harbors Investment Corp. reported $0.22 EPS against a consensus estimate of $0.22. The surprise factor in the prior quarter was -$0.02. Based on analyst estimates, the high estimate for the next quarter is $0.21 and the low estimate is $0.10. The average estimate for the next quarter is thus $0.18.

Summary of Insider Activity:

Insiders traded TWO stock several times over the past three months with 6 Buys and 5 Sells. In these transactions, 141,312 shares were bought while 79,514 shares were sold. The number of buy transactions has increased to 9 while that of sell transactions has risen to 11 over the past year. The total number of shares bought during that period was 456,754 while 423,274 shares were sold.

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