UPDATE: Compass Point Initiates Coverage on Ellington Financial on Impressive Total Return

In a report published Monday, Compass Point analyst Jason Stewart initiated coverage on

with a Buy rating and $26.50 price target. In the report, Compass Point noted, “EFC is an externally managed specialty finance company with a broad investment mandate to invest in real estate related securities. The company's active portfolio management and comprehensive hedging have produced an impressive total return through a volatile 1H13. At 92% of diluted book value per share (BVPS), we believe investors have an opportunity to purchase a company that has successfully executed through the volatile rate environment and is positioned to capitalize on the secular change that will occur in the mortgage finance sector. Our top recommendations in the group remain focused on non-Agency credit sensitive mortgage REITs. While the Fed may provide some reprieve from higher rates and wider spreads this week, it is increasingly clear the intermediate trajectory of interest rates is higher.” Ellington Financial LLC closed on Friday at $22.01.