Ellington Credit Company (NYSE:EARN) Sees Significant Increase in Short Interest

Key Points

• Short interest in Ellington Credit Company increased by 28.5% in August, totaling 306,100 shares as of August 31st, indicating growing bearish sentiment among investors.
• Ellington Credit recently reported quarterly earnings of $0.18 per share, missing the consensus estimate, with revenue of $9.87 million compared to expectations of $12.15 million.
• The company declared a $0.08 dividend payable on October 31st, which represents a striking 1,700.0% dividend yield given its high payout ratio of 533.33%.

Ellington Credit Company (NYSE:EARN - Get Free Report) was the recipient of a large increase in short interest in the month of August. As of August 31st, there was short interest totaling 306,100 shares, an increase of 28.5% from the August 15th total of 238,300 shares. Approximately 0.8% of the shares of the company are sold short. Based on an average trading volume of 313,800 shares, the days-to-cover ratio is currently 1.0 days. Based on an average trading volume of 313,800 shares, the days-to-cover ratio is currently 1.0 days. Approximately 0.8% of the shares of the company are sold short.

Wall Street Analysts Forecast Growth

EARN has been the subject of several analyst reports. Wall Street Zen raised Ellington Credit from a "sell" rating to a "hold" rating in a research note on Saturday, September 13th. UBS Group raised their target price on Ellington Credit from $5.50 to $5.75 and gave the stock a "neutral" rating in a report on Wednesday, July 16th. One research analyst has rated the stock with a Buy rating and one has given a Hold rating to the company. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $6.13.

Institutional Investors Weigh In On Ellington Credit

Large investors have recently modified their holdings of the stock. Millennium Management LLC grew its holdings in Ellington Credit by 485.8% in the 1st quarter. Millennium Management LLC now owns 932,326 shares of the real estate investment trust's stock valued at $5,044,000 after buying an additional 773,169 shares during the period. Delphi Financial Group Inc. grew its position in shares of Ellington Credit by 230.8% during the 2nd quarter. Delphi Financial Group Inc. now owns 608,700 shares of the real estate investment trust's stock worth $3,500,000 after buying an additional 424,700 shares during the period. Jane Street Group LLC grew its position in shares of Ellington Credit by 415.4% in the 1st quarter. Jane Street Group LLC now owns 379,906 shares of the real estate investment trust's stock valued at $2,055,000 after purchasing an additional 306,192 shares during the period. Clear Harbor Asset Management LLC boosted its stake in shares of Ellington Credit by 21.6% during the 2nd quarter. Clear Harbor Asset Management LLC now owns 350,500 shares of the real estate investment trust's stock worth $2,015,000 after buying an additional 62,200 shares during the last quarter. Finally, OMERS ADMINISTRATION Corp lifted its holdings in Ellington Credit by 103.8% during the 1st quarter. OMERS ADMINISTRATION Corp now owns 186,300 shares of the real estate investment trust's stock valued at $1,008,000 after purchasing an additional 94,900 shares during the last quarter. Hedge funds and other institutional investors own 20.40% of the company's stock.

Ellington Credit Stock Down 0.1%

EARN traded down $0.01 during trading hours on Friday, hitting $5.73. The stock had a trading volume of 179,116 shares, compared to its average volume of 271,004. Ellington Credit has a 1 year low of $4.32 and a 1 year high of $7.11. The company's fifty day simple moving average is $5.77 and its 200 day simple moving average is $5.64. The stock has a market cap of $215.03 million, a PE ratio of 31.81 and a beta of 1.31.

Ellington Credit (NYSE:EARN - Get Free Report) last posted its quarterly earnings results on Tuesday, August 19th. The real estate investment trust reported $0.18 earnings per share for the quarter, missing the consensus estimate of $0.20 by ($0.02). The business had revenue of $9.87 million during the quarter, compared to analysts' expectations of $12.15 million. Ellington Credit had a return on equity of 15.90% and a net margin of 19.24%. As a group, equities analysts expect that Ellington Credit will post 1.17 EPS for the current year.

Ellington Credit Announces Dividend

The company also recently announced a sep 25 dividend, which will be paid on Friday, October 31st. Investors of record on Tuesday, September 30th will be issued a dividend of $0.08 per share. This represents a yield of 1,700.0%. The ex-dividend date is Tuesday, September 30th. Ellington Credit's dividend payout ratio (DPR) is 533.33%.

About Ellington Credit

Ellington Credit Company, a real estate investment trust, acquires, invests in, and manages residential mortgage-and real estate-related assets. It acquires and manages residential mortgage-backed securities (RMBS), including agency pools and agency collateralized mortgage obligations (CMOs); and non-agency RMBS, such as non-agency CMOs, such as investment grade and non-investment grade.