Sandler O'Neill analyst Crisipin Love thinks Ellington Financial LLC's valuation presents "a unique opportunity for investors," and initiated coverage of the company with a "buy" rating and $17 price target in a Dec. 6 research note.
Ellington Financial's shares closed at $14.91 that day.
The stock is trading at 78% of book value and at a discount to peers, Love said. The company grew its credit portfolio quarter over quarter and by 23% in 2017 through the third quarter, the analyst wrote.
"We expect growth in the credit portfolio to continue and drive earnings growth in 2018," Love said.
He set his full-year EPS estimates for Ellington Financial at $1.09 for 2017, $1.42 for 2018 and $1.66 for 2019.