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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 – Residential 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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