Ellington Credit Company (NYSE:EARN) Short Interest Down 16.9% in April

Key Points

• Short interest fell 16.9% in April to 924,751 shares, about 2.5% of shares outstanding, with a days-to-cover ratio of 2.8—indicating reduced short-selling pressure.
• Ellington announced a monthly dividend of $0.08 per share (ex-dividend Apr 30), implying a 20.7% yield, but the dividend payout ratio is -234%, which raises sustainability concerns.
• The fund missed quarterly EPS estimates ($0.21 vs. $0.24) and reported a negative net margin of 34.31%, yet analysts’ consensus is a "Moderate Buy" with an average target price of $5.75.

Ellington Credit Company (NYSE:EARN - Get Free Report) saw a large drop in short interest in the month of April. As of April 15th, there was short interest totaling 924,751 shares, a drop of 16.9% from the March 31st total of 1,112,566 shares. Currently, 2.5% of the company's shares are sold short. Based on an average daily volume of 329,229 shares, the days-to-cover ratio is presently 2.8 days.

Analysts Set New Price Targets

Several research firms recently issued reports on EARN. Wall Street Zen upgraded Ellington Credit from a "sell" rating to a "hold" rating in a research report on Saturday, April 4th. Piper Sandler cut their target price on shares of Ellington Credit from $6.00 to $5.50 and set an "overweight" rating on the stock in a report on Friday, March 6th. One research analyst has rated the stock with a Buy rating and one has issued a Hold rating to the company. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $5.75.

Ellington Credit Stock Performance

EARN opened at $4.64 on Thursday. The stock's 50 day moving average price is $4.65 and its 200-day moving average price is $5.08. Ellington Credit has a 52-week low of $4.27 and a 52-week high of $6.08. The stock has a market capitalization of $174.32 million, a PE ratio of -11.28 and a beta of 1.29.

Ellington Credit (NYSE:EARN - Get Free Report) last issued its quarterly earnings data on Wednesday, March 4th. The real estate investment trust reported $0.21 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.24 by ($0.03). Ellington Credit had a negative net margin of 34.31% and a positive return on equity of 16.47%. The company had revenue of ($17.48) million for the quarter, compared to analysts' expectations of $12.71 million.

Ellington Credit Announces Dividend

The company also recently announced a monthly dividend, which will be paid on Friday, May 29th. Shareholders of record on Thursday, April 30th will be issued a dividend of $0.08 per share. The ex-dividend date is Thursday, April 30th. This represents a c) dividend on an annualized basis and a dividend yield of 20.7%. Ellington Credit's dividend payout ratio is -234.15%.

Institutional Investors Weigh In On Ellington Credit

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Osaic Holdings Inc. lifted its position in Ellington Credit by 60.3% during the second quarter. Osaic Holdings Inc. now owns 104,689 shares of the real estate investment trust's stock valued at $602,000 after buying an additional 39,392 shares during the period. Goldman Sachs Group Inc. lifted its position in Ellington Credit by 56.6% during the 1st quarter. Goldman Sachs Group Inc. now owns 126,864 shares of the real estate investment trust's stock valued at $686,000 after acquiring an additional 45,845 shares during the period. Jane Street Group LLC boosted its stake in Ellington Credit by 70.8% during the fourth quarter. Jane Street Group LLC now owns 135,107 shares of the real estate investment trust's stock worth $712,000 after acquiring an additional 56,012 shares in the last quarter. Millennium Management LLC grew its holdings in Ellington Credit by 485.8% in the first quarter. Millennium Management LLC now owns 932,326 shares of the real estate investment trust's stock worth $5,044,000 after purchasing an additional 773,169 shares during the period. Finally, Engineers Gate Manager LP purchased a new position in shares of Ellington Credit during the second quarter valued at approximately $83,000. 20.40% of the stock is owned by hedge funds and other institutional investors.

About Ellington Credit

Ellington Credit Income Fund NYSE: EARN is a closed-end management investment company that seeks to generate current income through a diversified portfolio of mortgage- and asset-backed securities. The fund primarily invests in residential mortgage-backed securities (RMBS) and asset-backed securities (ABS), with additional exposure to commercial mortgage-backed securities (CMBS) and related structured credit instruments. To enhance income and manage risk, the fund employs leverage and derivative strategies such as interest rate swaps and credit default swaps, allowing it to adjust duration and credit exposure dynamically.

The fund is externally managed and advised by Ellington Management Group, LLC, an established investment firm specializing in mortgage credit and structured products.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.