Hot Stock Alert: Ellington Financial Inc. (NYSE: EFC)

OLD GREENWICH, Conn., November 19, 2019 – Shares of Ellington Financial Inc. (NYSE: EFC) inclined 1.35% to $18.80. The stock traded total volume of 479.887K shares higher than the average volume of 222.88K shares.

Ellington Financial Inc. (NYSE:EFC) reported total long credit portfolio of $1.069B as of June 30, 2019, a decrease of 10.6% from $1.195B as of March 31, 2019. The Company’s total long agency RMBS portfolio was $1.339B as of June 30, 2019, an increase of 17.0% from $1.144B as of March 31, 2019. The quarter-over-quarter decline in the credit portfolio was mainly due to the completion of the Company’s third non-QM securitization. The Company also continued to pare down its holdings of non-REIT-qualifying assets, principally UK non-conforming RMBS and CLOs, and rotate that capital into REIT-qualifying assets, most notably agency RMBS, small-balance commercial mortgage loans and residential transition loans.

During the second quarter, the Company’s credit strategy generated total gross income of $16.30M, or $0.54 per share, and its agency strategy generated total gross income of $2.20M, or $0.07 per share.

The Company’s credit strategy generated net interest income of $18.60M, net realized and unrealized gains on our long investment portfolio of $2.40M, net realized and unrealized losses on interest rate hedges of $1.70M, net realized and unrealized losses of $0.30M on credit hedges and other activities, and other investment related expenses of $5.20M. The Company also had $2.40M in earnings from investments in unconsolidated entities. The Company’s strongest-performing credit strategies for the quarter included residential non-performing mortgage loans, non-QM loans, residential transition mortgage loans, European RMBS, non-agency RMBS, and CMBS. In addition, the Company continued to benefit from excellent performance in small-balance commercial mortgage loans and consumer loans. Investments in retained tranches in Ellington-sponsored CLOs underperformed during the quarter.

EFC has the market capitalization of $626.42M and its EPS growth ratio for the past five years was -14.30%. The return on assets ratio of the Company was 1.30% while its return on investment ratio stands at 1.70%. Price to sales ratio was 4.14 while 59.60% of the stock was owned by institutional investors.

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