EFC Should I Buy
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Ellington Financial Inc (EFC) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong financial growth in the latest quarter and maintains a solid dividend, the technical indicators and trading sentiment do not suggest an immediate buying opportunity. Additionally, there are no strong proprietary trading signals or significant positive catalysts to justify an entry at this time.
The technical indicators are mixed to bearish. The MACD is below 0 and negatively contracting, the RSI is neutral at 47.949, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of 12.867, with resistance at 13.258 and support at 12.475. These factors suggest no clear upward momentum.
Strong financial performance in Q3 2025, with revenue up 3.53% YoY, net income up 82.40% YoY, and EPS up 61.11% YoY.
Monthly dividend of $0.13 per share declared, indicating consistent shareholder returns.
Bearish technical indicators and lack of upward momentum.
Analysts have lowered the price target, reflecting concerns about the private credit market.
No significant hedge fund or insider trading activity to indicate confidence in the stock.
In Q3 2025, Ellington Financial reported revenue growth of 3.53% YoY to $118.37M, net income growth of 82.40% YoY to $29.50M, and EPS growth of 61.11% YoY to $0.29. However, gross margin declined by 8.09% YoY to 80.68%.
Piper Sandler has maintained an Overweight rating but lowered the price target from $6.50 to $6, citing concerns about private credit defaults. However, the analyst believes these concerns are overstated and fundamentals remain solid.
