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Altisource Asset Management (NYSE:AAMC – Get Rating) and Ellington Financial (NYSE:EFC – Get Rating) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.
Volatility & Risk
Altisource Asset Management has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Ellington Financial has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500.
Earnings and Valuation
This table compares Altisource Asset Management and Ellington Financial’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Altisource Asset Management | $15.76 million | 1.39 | -$6.00 million | $2.34 | 4.53 |
| Ellington Financial | $131.48 million | 7.16 | $135.25 million | $1.60 | 9.80 |
Ellington Financial has higher revenue and earnings than Altisource Asset Management. Altisource Asset Management is trading at a lower price-to-earnings ratio than Ellington Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Altisource Asset Management and Ellington Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Altisource Asset Management | N/A | -0.73% | 0.64% |
| Ellington Financial | 63.71% | 9.86% | 2.01% |
Insider & Institutional Ownership
15.9% of Altisource Asset Management shares are owned by institutional investors. Comparatively, 59.2% of Ellington Financial shares are owned by institutional investors. 1.5% of Altisource Asset Management shares are owned by insiders. Comparatively, 6.4% of Ellington Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Altisource Asset Management and Ellington Financial, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Altisource Asset Management | 0 | 0 | 0 | 0 | N/A |
| Ellington Financial | 0 | 2 | 2 | 0 | 2.50 |
Ellington Financial has a consensus target price of $19.00, indicating a potential upside of 21.17%. Given Ellington Financial’s higher possible upside, analysts plainly believe Ellington Financial is more favorable than Altisource Asset Management.
Summary
Ellington Financial beats Altisource Asset Management on 12 of the 13 factors compared between the two stocks.
About Altisource Asset Management (Get Rating)
Altisource Asset Management Corp. operates as an alternative lending company. The firm provides liquidity and capital to under-served markets. It assess opportunities which potentially be of long-term benefit to shareholders such as Crypto-ATMs. The company was founded on March 15, 2012 and is headquartered in Christiansted, Virgin Islands.
About Ellington Financial (Get Rating)
Ellington Financial Inc., through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company acquires and manages residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime residential mortgage loans; RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity; residential mortgage loans; commercial mortgage-backed securities; and commercial mortgage loans and other commercial real estate debt. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; corporate debt and equity securities; corporate loans; and other strategic investments. In addition, the company offers consumer loans and asset-backed securities backed by consumer and commercial assets. Ellington Financial LLC was incorporated in 2007 and is based in Old Greenwich, Connecticut.
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