Seeking Alpha

Ellington Financial remains nimble as MBS prices fall

  • Ellington Financial (EFC): Q2 operating EPS of $0.49 misses by $0.22.
  • Management burnishes its reputation for being top-flight mortgage traders with June 30 book value per share of $24.51 off just 1.1% from Q1's end. Today's closing stock price of $22.76 is a 7.1% discount to June 30 book.
  • Management notes the Q2 sale of a $9B non-agency MBS portfolio by a large U.K bank (Lloyds) as weighing on prices (in addition to sharply higher interest rates).
  • Management also notes Ellington's partnership structure (as opposed to a REIT) allows it greater flexibility in hedging - a big benefit in declining markets. "Our ability to nimbly rotate in and out of securities and sectors as market conditions change remains a hallmark of our portfolio management style."
  • The earnings call at 11 ET should be worth a listen.
  • Shares -1.3% in very thin AH trading. (PR)

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