Stock fact sheet · data as of
Ellington Credit Company (EARN): fair value, margin of safety and Wheel Score
Ticker symbol EARN · Financial Services · Asset Management · United States · Shares of beneficial interest (trust) · Speculative Income
EARN trades as shares of beneficial interest in Ellington Credit Company - a trust rather than a company.
Is EARN undervalued?
At 3.43 (close of 5 Nov 2026), EARN trades 94% below the GLS average fair value of 55.45. That average comes from 2 models run on the latest filings, and 2 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns Ellington Credit Company the full Value points in the Wheel Score - and a closer look at what the market is pricing in.
Only 2 of the nine models produced a value (10 Cap, DDM); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.
The nightly engine files EARN under Speculative - it is losing money or its Piotroski health score is 3 or lower - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan. It also carries the Income tag (Income = a dividend yield of 4% or more).
Nine valuation models for EARN
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | - | - | Present value of the projected free cash flows, discounted at the cost of capital; no value tonight |
| Graham Number | - | - | The most a defensive investor pays for the earnings and book value per share; no value tonight |
| Graham Growth | - | - | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields; no value tonight |
| Lynch | - | - | EPS × the earnings growth rate (PEG of 1), growth capped at 25%; no value tonight |
| GLS Growth | - | - | EPS compounded ten years at the blended growth rate, discounted back at 15% a year; no value tonight |
| 10 Cap | 96.77 | +2721% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | - | - | Eight years of compounded free cash flow: the price at which the business pays for itself; no value tonight |
| DDM | 14.13 | +312% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | - | - | Earnings power value: current EPS capitalised at 9% with no growth; no value tonight |
| Zombie (liquidation) | -4.12 | -220% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 4.50 | +31% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: EARN passes 4 of the nine Piotroski tests. Our scans drop the stock at the health filter; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 2.0 out of 10: returns on capital, margins or the balance sheet have not shown a lasting edge yet - often a young company, a thin-margin business or one that has only recently turned profitable.
Returns on capital are thin or negative - ROIC -3.9%, ROE -9.4%, ROA -3.7% - with debt at 1.43 times equity and a free-cash-flow yield of 139.0%.
The dividend yield is high at 27.99% (payout ratio -24%). A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.
Institutional ownership scores 1/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 4 / 9 | ROIC | -3.9% |
|---|---|---|---|
| GLS Moat | 2.0 / 10 | ROE | -9.4% |
| Debt / equity | 1.43 | ROA | -3.7% |
| Free-cash-flow yield | 139.0% | Payout ratio | -24% |
| Institutions | 1 / 10 | Insiders · Congress | 5 · 5 / 10 |
Wheel Score 31: Weak
EARN scores 31 out of 100 on the Wheel Score, in the Weak band (under 50): it fails filter 1, options that actually trade - options too quiet (0 open interest, 5 a day); and filter 2, a real business, not a gamble - speculative (a loss, or a weak Piotroski score); and filter 4, financially healthy - Piotroski 4/9 (under 6); and filter 7, a premium worth selling - implied volatility 90% (over 80%); and filter 8, big enough - market cap $131M (under $1.0B); and filter 9, not a penny stock - price 3.43 (under $5), and the parts are thin too - value strong, premium fair, moat weak, health fair, red flags weak, option trading weak, stability fair. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.
Implied volatility is 90%, above the 80% ceiling of the Wheel Trade Filter on premium. The premium looks generous, but moves of that size can blow through any strike. Chain open interest is thin - 0 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.
Volume runs at 287k shares a day on a market cap of $131M, with a beta of 1.29 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score rates that fair.
| Filter | Wheel Trade Filter | Result | Detail |
|---|---|---|---|
| 1 | Options that actually trade | Fails | options too quiet (0 open interest, 5 a day) |
| 2 | A real business, not a gamble | Fails | speculative (a loss, or a weak Piotroski score) |
| 3 | Below fair value | Passes | Trading below the nine-model average fair value (margin of safety above 0) |
| 4 | Financially healthy | Fails | Piotroski 4/9 (under 6) |
| 5 | Can repay its debt | Passes | Long-term debt repaid from 3 years of operating cash flow or less (6 for real estate and utilities; banks and insurers are not judged on it) |
| 6 | No serious red flags | Passes | Red Flags score 60 or more out of 100 (earnings, margins, debt, analysts, filings and price checked the same way for every stock) |
| 7 | A premium worth selling | Fails | implied volatility 90% (over 80%) |
| 8 | Big enough | Fails | market cap $131M (under $1.0B) |
| 9 | Not a penny stock | Fails | price 3.43 (under $5) |
| How it ranks | Rating | From | |
|---|---|---|---|
| Value | Strong | 94% below fair value | |
| Premium | Fair | implied volatility 90% | |
| Moat | Weak | moat 2.0/10 | |
| Health | Fair | Piotroski 4/9 | |
| Red Flags | Weak | Red Flags score 60/100 | |
| Option trading | Weak | 5 contracts a day, 0 open interest | |
| Stability | Fair | beta 1.29, $131M company |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.
Upcoming events
Ellington Credit Company reports earnings on 18 Nov 2026 - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
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| ATESX Anchor Risk Managed Equity Strategies Fund - Institutional Class | 15.43 | 1.16 | -1226% | 10No options | $132M |
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| ACSMX Advisors Capital Small/Mid Cap | 11.85 | 430.87 | +97% | 26No options | $129M |
| SPMC Sound Point Meridian Capital Inc | 6.20 | 37.96 | +84% | 27No options | $128M |
| BCV Bancroft Fund Ltd. | 21.81 | 167.60 | +87% | 26No options | $127M |
| BGX Blackstone Long-Short Credit Income Fund | 10.65 | 11.28 | +6% | 14No options | $135M |
| HEQ John Hancock Diversified Income Fund | 11.35 | 14.71 | +23% | 23No options | $135M |
| SPE Special Opportunities Fund, Inc. | 12.30 | 45.27 | +73% | 26No options | $136M |
| HYI Western Asset High Yield Defined Opportunity Fund Inc. | 9.77 | 29.94 | +67% | 25No options | $125M |
| MZCSX Muzinich Dynamic Income Fund Supra Institutional Shares | 9.42 | 4,035.66 | +100% | 25No options | $137M |
| MSD Morgan Stanley Emerging Markets Debt Fund, Inc. | 6.85 | 26.79 | +74% | 24No options | $139M |
| JHS John Hancock Income Securities Trust | 10.53 | 21.13 | +50% | 30No options | $123M |
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the top 10 stocks that pass all 9 Wheel Trade Filters, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about EARN
Is EARN undervalued right now?
By the GLS models, yes: at 3.43 the stock is 94% below the average fair value of 55.45 (data as of 5 Nov 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of EARN and what does it mean?
EARN scores 31 out of 100 (Weak) - it fails Wheel Trade Filters 1, 2, 4, 7, 8, 9. The Wheel Score ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned - in two parts: the 9 pass/fail Wheel Trade Filters (busy options, a real business, below fair value, Piotroski 6 or more, debt it can repay, a Red Flags score of 60 or more, implied volatility of 25-80%, a $1 billion company, $5 a share) and a ranking of how strongly a stock passes on value, premium, moat, health, red flags, option trading and stability. A stock that fails any filter stays under 70; 70-84 is Good, 85 and above is Prime. The Sunday Scan is the top 10 that pass, sorted by Wheel Score.
What is the GLS fair value for EARN?
55.45 per share as of 5 Nov 2026 - the simple average of the 2 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Ellington Credit Company report earnings next?
The next earnings report is due on 18 Nov 2026, 13 days from the data date of 5 Nov 2026. The Calendars page lists every upcoming report with its time of day.
Does EARN have listed options, and how liquid are they?
Yes. The nightly snapshot found 4 listed contracts with 0 open interest across all expiries and implied volatility of 90% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.