MeritValue

Ellington Financial Inc.

EFCdata completeness 75%17 fiscal years on file

Data notes: no data for concept 'revenue'

The thesis, from the filings

Ellington Financial Inc. earns about 20% on invested capital, but has diluted owners by 104% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $12.15 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 2021FY 2022FY 2023FY 2024FY 2025
Revenue—————
Net income$125.3M1−$85.3M2$60.9M3$117.8M3$118.7M3
Operating cash flow$51.3M4$42.7M5−$241.9M6−$430.5M6−$925.5M6
Capital expenditure$2.21M7$222,0008−$37,0009$09$09
Free cash flow (derived)$49.1M4$42.5M5−$241.8M6−$430.5M6−$925.5M6
Total debt$85.8M10$010———
Cash & equivalents$92.7M11$217.1M12$228.9M12$192.4M12$201.9M12
Diluted shares49.2M60.6M69.1M87.7M100.5M

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
$182.46
your share of equity
Profit it earned you last year
$11.81
Free cash flow it threw off
−$92.06
Debt you’d be carrying
—

10 shares is a claim on $182.46 of net worth that earned you $11.81 and generated −$92.06 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
20% avg · 5y
FY21 10%FY22 9%FY23 27%FY24 29%FY25 24%

It earned an average 20% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+104% shares · 5y

Share count is up 104% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 100% — deleveraging.

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
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$12.15
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$117.8M
  • growthAssumed0.0%
Graham Number
$22.1
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001411342-24-000021 (NetIncomeLoss)
  2. 10-K · period ending 2022-12-31 · accession 0001411342-25-000015 (NetIncomeLoss)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-013279 (NetIncomeLoss)
  4. 10-K · period ending 2021-12-31 · accession 0001411342-24-000021 (NetCashProvidedByUsedInOperatingActivities)
  5. 10-K · period ending 2022-12-31 · accession 0001411342-25-000015 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-013279 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2021-12-31 · accession 0001411342-24-000021 (PaymentsForCapitalImprovements)
  8. 10-K · period ending 2022-12-31 · accession 0001411342-25-000015 (PaymentsForCapitalImprovements)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-013279 (PaymentsForCapitalImprovements)
  10. 10-K · period ending 2021-12-31 · accession 0001411342-23-000056 (LongTermDebt)
  11. 10-K · period ending 2021-12-31 · accession 0001411342-25-000015 (CashAndCashEquivalentsAtCarryingValue)
  12. 10-K · period ending 2022-12-31 · accession 0001628280-26-013279 (CashAndCashEquivalentsAtCarryingValue)