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Ellington Financial Upped to Strong Buy - Analyst Blog

Posted: 5/14/2013 6:06:00 PM
Referenced Stocks: BANC;EFC;HLSS;NSM

On May 10, 2013, Zacks Investment Research upgraded Ellington Financial LLC ( EFC ) to a Zacks #1 Rank (Strong Buy).

Why the Upgrade?

Ellington Financial has been witnessing rising earnings estimates on the back of strong fiscal first-quarter 2013 results. Moreover, shares of this mortgage investment company appreciated 15.6% year to date.

On May 6, 2013, Ellington Financial reported first-quarter net income of $40.3 million compared with $24.8 million in the previous quarter.

The sequential improvement was driven by higher net investment income and interest income as well as lower operating expenses.

Net investment income was $10.6 million, up substantially from the previous quarter. On a per share basis, net investment income came in at 51 cents per share, substantially higher than 18 cents recorded in the prior quarter. Total expenses reduced 39.8% sequentially to $7.8 million. The decline was attributable to a reduction in incentive fees and other operating expenses. Interest income nudged up 10.4% to $18.4 million.

Over the last 7 days, 1 out of 2 estimates for 2013 has been revised upward, raising the Zacks Consensus Estimate by 14.8% to $3.44 per share. For 2014, 1 out of 2 estimates moved higher over the same time frame, pulling the Zacks Consensus Estimate by 2.0% to $3.00 per share.

Other Stocks to Consider

Other stocks in the same sector that are also worth considering include Home Loan Servicing Solutions, Ltd . ( HLSS ), Nationstar Mortgage Holdings Inc . ( NSM ) and First Pactrust Bancorp, Inc . ( BANC ). All these carry a Zacks Rank #1 (Strong Buy). 

FIRST PACTRUST (BANC): Free Stock Analysis Report

ELLINGTON FINL (EFC): Free Stock Analysis Report

HOME LOAN SERVC (HLSS): Free Stock Analysis Report

NATIONSTAR MTGE (NSM): Free Stock Analysis Report

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Zacks Investment Research