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Is this Large Market Cap Stock target price reasonable for Two Harbors Investment Corp. (NYSE:TWO)?

The company in question is, Two Harbors Investment Corp. (NYSE:TWO) currently with a stock price of 8.23 (-0.18% today). The market cap for Two Harbors Investment Corp. is 2867.68, and is in the sector Financial, and REIT РResidential industry. The target price for Two Harbors Investment Corp. is 9.4. Currently Two Harbors Investment Corp. is trading with a P/E of 44.12, and a forward P/E of 8.73. Average volume for Two Harbors Investment Corp. is 1920.94 and so far today it is 1114316.

Performance in the last year for Two Harbors Investment Corp. has been 3.43%. For EPS growth, Two Harbors Investment Corp. has seen a growth of 195.10%, and is looking to grow in the next year to 6.42%. More long term stats show that EPS growth has been -3.30% over the last five years and could be 5.50% for the next five years. Two Harbors Investment Corp. has seen sales growth quarter over quarter at 1.50%, with EPS growth quarter over quarter at -108.10%. The 20-day simple moving average is -4.01%, with the 200-day simple moving average coming to 4.83%.

Since the IPO date for Two Harbors Investment Corp. on the 10/30/2009, Two Harbors Investment Corp. has seen performance year to date to be 10.70%. With Two Harbors Investment Corp. trading at 8.23, the dividend yield is 11.15%, and the EPS is 0.19.

So could Two Harbors Investment Corp., be undervalued? Well as said before P/E is 44.12. The PEG is 8.02, P/S is 5.01 and the P/B is at 0.84. The P/cash is 4.14, with P/free cash flow at *TBA.

Two Harbors Investment Corp. ability to deal with debt shows that the current ratio is *TBA, and the quick ratio is *TBA. This is with long term debt/equity at 0.91, and total debt/equity at 3.74.

In terms of margins, Two Harbors Investment Corp. has a gross margin of 55.10%, an operating margin of 10.80% and a profit margin of 12.20%.Payout ratio for Two Harbors Investment Corp. is 523.50%. Return on assets come to 0.40% with return on investment coming to 4.70%.

Insider ownership for Two Harbors Investment Corp., is at 0.50% and institutional ownership comes to 72.10%. Outstanding shares are at 347.6. While shares float is 344.21. The float short is currently 1.10%, and short ratio is 1.96.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Stephen Butters

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