HLSS (MM)

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