NEW YORK ( TheStreet) -- Ennis (NYSE: EBF) 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.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
- 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.
-- Written by a member of TheStreet Ratings Staff