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Two Harbors Investments (TWO) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

Two Harbors Investments (TWO) closed at $4.20 in the latest trading session, marking a +1.7% move from the prior day. This move outpaced the S&P 500's daily loss of 3.01%. Elsewhere, the Dow lost 2.59%, while the tech-heavy Nasdaq lost 3.55%.

Prior to today's trading, shares of the real estate investment trust that invests in mortgage-backed securities had lost 4.4% over the past month. This has lagged the Finance sector's gain of 15.41% and the S&P 500's gain of 22.85% in that time.

TWO will be looking to display strength as it nears its next earnings release, which is expected to be May 6, 2020. On that day, TWO is projected to report earnings of $0.34 per share, which would represent a year-over-year decline of 30.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $39.30 million, down 52.05% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.84 per share and revenue of $161.20 million, which would represent changes of -38.69% and -42.5%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for TWO. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 40% lower. TWO is currently sporting a Zacks Rank of #5 (Strong Sell).

Investors should also note TWO's current valuation metrics, including its Forward P/E ratio of 4.92. This valuation marks a discount compared to its industry's average Forward P/E of 5.83.

The REIT and Equity Trust industry is part of the Finance sector. This group has a Zacks Industry Rank of 171, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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