Matthew Koeppen, Chief Investment Officer at Two Harbors Investment Corp (TWO), recently added 20,000 shares to his holdings. The buy came to just over $133,000.
He was joined a day later by William Greenberg, the company President and CEO, who bought 35,000 more shares, at a total cost of just over $230,000. These mark the first insider buys since 2019. Prior actions over the past year have been sales.
Shares of the mortgage real estate investment trust (REIT) are down nearly 60 percent over the past year, but have been trending higher in recent months as real estate has recovered and mortgage forbearances have been waning.
- Insurance For Your Investments? The Answer...Options
Investors are reevaluating how to do things in 2021. With Options, a stock’s price can drop to zero, but you can never lose more than the option’s premium and you know the full amount at risk right from the get-go.
Options are the most dependable form of hedge, and this also makes them safer than stocks.
Action to take: With insiders buying shares again, and with shares trending higher, this looks like a reasonable investment play here. Shares are still trading under their book value, so there’s some margin of safety if the mortgage market remains weak.
Investors may like shares in particular, as the rising dividend payment and lower share price have pushed the stock’s yield up to 10.3 percent.
Traders can play the trend higher with a call option. The May 2021 $7 calls are the at-the-money trade. Last trading for around $0.65, they have the potential for a low triple-digit gain if the current uptrend continues over the next few months.