Ennis (EBF) Is Weak On High Volume Today

Trade-Ideas LLC identified Ennis ( EBF) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Ennis as such a stock due to the following factors:

  • EBF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.9 million.
  • EBF has traded 108,099 shares today.
  • EBF is trading at 10.79 times the normal volume for the stock at this time of day.
  • EBF is trading at a new low 11.19% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on EBF:

Ennis, Inc. produces and sells business forms and other business products in the United States. The stock currently has a dividend yield of 3.5%. EBF has a PE ratio of 179.

The average volume for Ennis has been 181,300 shares per day over the past 30 days. Ennis has a market cap of $506.3 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.74 and a short float of 4% with 3.68 days to cover. Shares are up 5.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ennis as a 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, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • EBF's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.27, which clearly demonstrates the ability to cover short-term cash needs.
  • After a year of stock price fluctuations, the net result is that EBF's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • ENNIS INC's earnings per share declined by 27.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENNIS INC turned its bottom line around by earning $1.39 versus -$1.72 in the prior year. This year, the market expects an improvement in earnings ($1.47 versus $1.39).
  • The revenue fell significantly faster than the industry average of 6.4%. Since the same quarter one year prior, revenues fell by 40.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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