Is Two Harbors Investments Corp (TWO) Stock Undervalued Right Now?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Two Harbors Investments Corp (TWO). TWO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is TWO's P/B ratio of 0.83. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. TWO's current P/B looks attractive when compared to its industry's average P/B of 0.96. TWO's P/B has been as high as 0.92 and as low as 0.64, with a median of 0.83, over the past year.
Finally, we should also recognize that TWO has a P/CF ratio of 8.77. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TWO's current P/CF looks attractive when compared to its industry's average P/CF of 27.85. Within the past 12 months, TWO's P/CF has been as high as 16.77 and as low as -17.63, with a median of 8.71.
These are only a few of the key metrics included in Two Harbors Investments Corp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TWO looks like an impressive value stock at the moment.
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Two Harbors Investments Corp (TWO) : Free Stock Analysis Report