NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- EBF's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EBF has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $14.77 million or 31.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.09%.
- ENNIS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ENNIS INC reported lower earnings of $1.21 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($1.34 versus $1.21).
- The revenue fell significantly faster than the industry average of 31.1%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
Ennis, Inc., together with its subsidiaries, engages in the print and manufacture of business forms and other business products. The company operates in two segments, Print and Apparel. The Print segment designs, manufactures, and sells business forms and other printed business products. The company has a P/E ratio of 16.3, equal to the average consumer non-durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Ennis has a market cap of $392 million and is part of the
industry. Shares are up 12.5% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.