MeritValue

Ellington Credit Co

EARNdata completeness 63%12 fiscal years on file

Data notes: no data for concept 'revenue'; no data for concept 'capex'; no data for concept 'totalDebt'; no data for concept 'epsDiluted'

The thesis, from the filings

Ellington Credit Co earns about -2% on equity, but has diluted owners by 91% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $2 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2020FY 2021FY 2022FY 2023FY 2024
Revenue—————
Net income$20.1M1−$6.31M2−$30.2M3$4.56M4$6.59M4
Operating cash flow$24.4M5$27.9M6$22.4M7−$10M8$9.11M8
Capital expenditure—————
Free cash flow (derived)—————
Total debt—————
Cash & equivalents$58.2M9$69M10$34.8M11$38.5M11$31.8M11
Diluted shares12.4M12.7M13.2M14.9M23.6M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$82.17
your share of equity
Profit it earned you last year
$2.79
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on $82.17 of net worth that earned you $2.79 last year.

iii. Is this a good business?
Moat signal · return on equity
-2% avg · 5y
FY20 12%FY21 -4%FY22 -27%FY23 3%FY24 3%

It earned an average -2% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+91% shares · 5y

Share count is up 91% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$2
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$4.56M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2020-12-31 · accession 0001560672-22-000014 (NetIncomeLoss)
  2. 10-K · period ending 2021-12-31 · accession 0001560672-23-000021 (NetIncomeLoss)
  3. 10-K · period ending 2022-12-31 · accession 0001560672-24-000017 (NetIncomeLoss)
  4. 10-K · period ending 2023-12-31 · accession 0001560672-25-000074 (NetIncomeLoss)
  5. 10-K · period ending 2020-12-31 · accession 0001560672-22-000014 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2021-12-31 · accession 0001560672-23-000021 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2022-12-31 · accession 0001560672-24-000017 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-12-31 · accession 0001560672-25-000074 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2020-12-31 · accession 0001560672-23-000021 (CashAndCashEquivalentsAtCarryingValue)
  10. 10-K · period ending 2021-12-31 · accession 0001560672-24-000017 (CashAndCashEquivalentsAtCarryingValue)
  11. 10-K · period ending 2022-12-31 · accession 0001560672-25-000074 (CashAndCashEquivalentsAtCarryingValue)