Stock in Focus: Two Harbors Investment Corp. (TWO)

Company Profile:

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, hybrid mortgage loans, or derivatives; non-agency securities collateralized by prime mortgage loans, Alt-A mortgage loans, pay-option ARM loans, and subprime mortgage loans; and other assets, such as financial and mortgage-related assets, as well as residential mortgage loans and non-hedging transactions. Two Harbors Investment Corp. was incorporated in 2009 and is headquartered in New York, New York.

Recent News:

The company reported GAAP Net Income of $125.7 million, or $0.72 per weighted average basic common share, for the quarter ended June 30, 2018, as compared to GAAP Net Income of $321.1 million, or $1.83 per weighted average basic common share, for the quarter ended March 31, 2018.

On July 31, 2018, Two Harbors Investment Corp. (TWO) and CYS Investments, Inc. (CYS) announced the closing of the previously announced merger between Two Harbors and CYS.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

TWO’s strengths can be seen in its better growth, strong profitability and robust efficiency compared with its peers. Technical indicators signal the bullish signs, as there is a bullish crossover in Stochastic oscillator, RSI is strong in the bullish zone and MACD is trying to cross back up. We rate Two Harbors Investment Corp. (TWO) a STRONG BUY.

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