We recently published a list of 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman. Since Ellington Financial Inc (NYSE:EFC) ranks 10th in the list, it deserves a deeper look.
Billionaire Leon Cooperman made headlines in April when he predicted during an interview with CNBC that the US is headed for a financial crisis. Cooperman, who calls himself a “capitalist with a heart,” said that the Federal Reserve kept interest rates near zero, but raised them dramatically in a period of 12 months. Still, the 81-year-old billionaire sees no signs that the economy is “restrictive,” as he pointed to stock market highs and speculation. The Omega Family Office chairman and CEO expects “one or two” rate cuts this year. He emphasized that the market remains overvalued.
Were Billionaire Cooperman’s Recession Predictions Correct?
This isn’t the first time Cooperman warned the market about recession. In February last year, the billionaire said that the market was headed for a recession, and noted that the S&P 500 high of about 4,800 recorded in 2022 could “stand for some time.” In July 2022, while talking to Bloomberg, Cooperman said that he was “shocked” that interest rates were so low.
“I am of the view that equities are the best house in the financial asset in the neighborhood, but I don’t like the neighborhood, for a lot of reasons.”
Cooperman in the Bloomberg interview in 2022 had categorically said that sooner or later the strong dollar, prices of oil and the Fed would “lead us into a recession.” He went on to add that recession would be a “2023 event” and predicted that the market would bottom somewhere near 35% to 45% below its peak of 4800.
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The billionaire had said that he would be “very surprised” if we were to see another bull market anytime soon, given his view that we’ve had one of the biggest bull runs driven by FAANG, SPACs, and speculation. The AI revolution that started in 2023 was indeed a shocker for Cooperman as his recession predictions were proven wrong.
For this article, we scanned billionaire Cooperman’s Q1’2024 portfolio and chose his top 10 dividend stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Ellington Financial Inc (NYSE:EFC)
Number of Hedge Fund Investors: 6
Billionaire Leon Cooperman’s Stake: $1,771,500
Mortgage REIT Ellington Financial Inc (NYSE:EFC) is one of the best dividend stocks to buy according to billionaire Leon Cooperman. Ellington Financial Inc (NYSE:EFC) buys and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. Ellington Financial Inc (NYSE:EFC) is a monthly dividend stock with a high yield. The stock is down about 7% over the past one year amid volatility in the mortgage market. However, Ellington bulls believe the company can rebound amid a recovery in home sales. According to the National Associate of Realtors, existing home sales are expected to rise by 13.5% in 2024 while new home sales could increase by 19% by the end of this year.
Last month, Ellington Financial Inc (NYSE:EFC) reported Q1 results. Adjusted EPS in the quarter came in at $0.28, missing estimates by $0.08. Ellington Financial Inc’s (NYSE:EFC) price to book value as of May 31 is 0.8, while its historical median price to book value is 0.9. This metric, which is often used for valuating mortgage REITs, is also lower than P/Book Value of competitors like Chicago Atlantic Real Estate Finance Inc and Strawberry Fields REIT Inc.
Overall, Ellington Financial Inc (NYSE:EFC) ranks 10th in Insider Monkey’s list of the 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman. You can visit the 10 Best Dividend Stocks to Buy According to Billionaire Leon Cooperman to see the other Billionaire Leon Cooperman’s 2024 stocks that are on his radar. While we acknowledge the potential of Ellington Financial Inc (NYSE:EFC), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Ellington Financial Inc (NYSE:EFC) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
