Ellington Credit (NYSE:EARN) Stock Crosses Below 200 Day Moving Average - Should You Sell?

Key Points

• Ellington Credit shares fell below their 200-day moving average, trading as low as $4.30 and closing near $4.32 versus the $4.60 long-term average. Piper Sandler cut its price target to $5.00 but maintained an “overweight” rating.
• The company’s latest quarterly results missed expectations, reporting EPS of $0.15 versus the $0.20 consensus and revenue of $6.08 million compared with estimates of $10.57 million.
• Ellington Credit announced a monthly dividend of $0.08 per share, representing an exceptionally high stated annualized yield of 22.2%. Analysts’ average rating remains “Moderate Buy,” with an average price target of $5.50.

Shares of Ellington Credit Company (NYSE:EARN - Get Free Report) crossed below its 200-day moving average during trading on Tuesday . The stock has a 200-day moving average of $4.60 and traded as low as $4.30. Ellington Credit shares last traded at $4.32, with a volume of 355,492 shares trading hands.

Analysts Set New Price Targets

Separately, Piper Sandler dropped their target price on Ellington Credit from $5.25 to $5.00 and set an "overweight" rating on the stock in a report on Monday, July 13th. One analyst has rated the stock with a Buy rating and one has issued a Hold rating to the company. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $5.50.

Ellington Credit Stock Down 1.1%

The firm's 50 day moving average price is $4.40 and its two-hundred day moving average price is $4.60. The firm has a market capitalization of $162.35 million, a PE ratio of -4.41 and a beta of 1.28.

Ellington Credit (NYSE:EARN - Get Free Report) last released its quarterly earnings results on Wednesday, August 12th. The real estate investment trust reported $0.15 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.20 by ($0.05). The company had revenue of $6.08 million for the quarter, compared to analysts' expectations of $10.57 million.

Ellington Credit Announces Dividend

The firm also recently announced a monthly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Monday, August 31st will be given a dividend of $0.08 per share. This represents a c) dividend on an annualized basis and a dividend yield of 22.2%. The ex-dividend date of this dividend is Monday, August 31st. Ellington Credit's payout ratio is presently -97.96%.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the business. Focus Financial Network Inc. acquired a new stake in Ellington Credit during the 2nd quarter valued at approximately $154,000. McIlrath & Eck LLC increased its holdings in Ellington Credit by 122.4% during the 1st quarter. McIlrath & Eck LLC now owns 10,969 shares of the real estate investment trust's stock worth $49,000 after purchasing an additional 6,038 shares during the last quarter. Waverly Advisors LLC raised its position in shares of Ellington Credit by 85.8% in the 1st quarter. Waverly Advisors LLC now owns 167,250 shares of the real estate investment trust's stock valued at $741,000 after purchasing an additional 77,250 shares in the last quarter. World Investment Advisors acquired a new position in shares of Ellington Credit in the 4th quarter valued at approximately $115,000. Finally, Virtu Financial LLC purchased a new position in shares of Ellington Credit during the 4th quarter valued at approximately $57,000. Institutional investors and hedge funds own 20.40% of the company's stock.

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.

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