Keefe Bruyette Issues a Upgrade for Two Harbors Investment (NYSE:TWO) from a “Mkt Perform” to “Outperform” Rating


Two Harbors Investment (NYSE:TWO) Stock Upgrade

In analysts note distributed to Clients on Monday morning, Keefe Bruyette announced that they have decided to upgrade shares of Two Harbors Investment (NYSE:TWO) stock from a “Mkt Perform” to a “Outperform”.

From a total of 14 analysts covering Two Harbors Investment (NYSE:TWO) stock, 11 rate it a ”Buy”, 0 a “Sell”, and 4 a ”Hold”. This means that 73% of the ratings are positive. The highest target price is $10.5 while the lowest target price is $9. The mean of all analyst targets is $10.02 with a 25.76% above today’s ($7.92) stock price. Two Harbors Investment was the topic of 9 analyst reports since August 6, 2015 according to the firm StockzIntelligence Inc. Maxim Group maintained shares on November 9 with “Buy” rating.

Approximately 1.32M shares of stock traded hands. Two Harbors Investment Corp (NYSE:TWO) has declined 23.06% since May 11, 2015 and is downtrending. It has underperformed by 18.65% the S&P500.

The overall sentiment of institutions has decreased to 0.97 in Q2 2015. Its down 0.15, from 1.12 in 2015Q2. The ratio worsened, as 31 institutions have sold all the shares of Two Harbors Investment Corp that they owned while 89 funds have taken shares off the table. 31 funds have purchased shares for the first time while 85 added to their positions. These institutions now hold 227.89 million shares or 8.41% less than the 248.82 million shares they owned in 2015Q2.

The Fund Wesley Capital Management Llc currently is holding shares equating to 7.79% of its total portfolio in Two Harbors Investment Corp representing a total of 1.04 million shares. Another fund,Berson & Corrado Investment Advisors Llc, is holding a total of 749,896 shares equating to 3.74% of their holdings. Additionally, Pergamon Offshore Advisors L.P. has a 357,560 share stake in Two Harbors Investment Corp which represents 3.43% of their total portfolio. The Fund, Icm Asset Management Inc Wa, based out of Washington, has also built up a stake in the stock, which represents a total of 2.96% of their total portfolio. Finally Kempen Capital Management N.V., a fund which is based in the state of Netherlands reported a total holdings of 2.75 million shares.

Two Harbors Investment Corp. operates as a real estate investment trust (REIT). The company has a market cap of $2.90 billion. The Company’s investment objective is to provide risk-adjusted total return to its stockholders over the long-term, primarily through dividends and secondarily through capital appreciation. It has 11.88 P/E ratio. The Company’s target assets include Agency residential mortgage-backed securities (RMBS) (which includes inverse interest-only Agency securities classified as Agency Derivatives), meaning RMBS whose principal and interest payments are guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac; Non-Agency RMBS, meaning RMBS that are not issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac; Residential mortgage loans; mortgage servicing rights (MSR); Commercial real estate debt and related assets, and other financial assets comprising approximately 5% to 10% of the portfolio.

According to Zacks Investment Research, “Two Harbors Investment Corp is a Real Estate Investment Trust that focuses on investing in, financing and managing residential mortgage-backed securities and mortgage loans. Its objective is to provide risk-adjusted returns to investors through dividends and capital appreciation. Two Harbors intends to acquire and manage a portfolio of mortgage-backed securities, focusing on security selection and the relative value of various sectors within the mortgage market. As an investment strategy, the company expects to deploy moderate borrowings through, with respect to Agency RMBS, short-term borrowings structured as repurchase agreements and, with respect to non-Agency RMBS and residential mortgage loans, private funding sources. It may also finance portions of its portfolio through non-recourse term borrowing facilities and equity financing under the Legacy Loan Program and Term Asset-Backed Securities Lending Facility (TALF), if such financing becomes available.”