EBF

Ennis Inc.($EBF): Director Dumps $517K in Shares While CFO Buys In - Mixed Signals Amid Earnings Decline and 5.27% Dividend Yield

05/12/2025 22:06

Printing solutions provider Ennis Inc. ($EBF) is showing conflicting insider trading signals, as a board member's significant selling spree contrasts with a recent purchase by the company's CFO, drawing investor attention to this small-cap stock. Director Michael Schaefer executed five consecutive sales transactions over just eight days from April 25 to May 5, 2025. He sold a total of 28,852 shares worth approximately $517,000, at average prices ranging from $17.82 to $18.09 per share. This substantial selling activity likely relates to the company's recent announcement that Schaefer will not be nominated for re-election to the board. In an interesting counterpoint, CFO Vera Burnett purchased 498 shares at $19.09 on May 9, 2025. Though relatively modest at approximately $9,506, this purchase carries significant timing implications as it occurred immediately following Schaefer's selling spree and after a considerable drop in the company's stock price. Burnett's purchase is connected to Time-Based Restricted Units granted on April 19, 2024, which vest over a period from April 21, 2025, to April 19, 2027. These contrasting insider trading signals should be examined alongside Ennis's recent financial performance. On April 21, 2025, the company reported results for the quarter ending February 28, with adjusted earnings of $0.35 per share, down from $0.39 in the year-ago period. Revenue decreased by 4.9% to $92.70 million, missing analyst expectations of $95.60 million. It's noteworthy that Schaefer's selling began immediately following this disappointing earnings release. Ennis's stock price suffered a significant decline after the earnings announcement. Trading above $20 in early April, the stock plummeted to $17.27 on the day of the earnings release (April 21). It has since hovered around the $18 mark before recently rebounding to $18.96 as of May 9. This timing aligns with the CFO's purchase, suggesting that management may view current price levels as attractive. Established in 1909 and headquartered in Texas, Ennis operates in the business equipment and supplies sector, manufacturing and selling various business forms and products including snap sets, continuous forms, laser cut sheets, tags, labels, and envelopes. The company is pursuing external growth initiatives, as evidenced by its recent acquisition of Northeastern Envelope, announced on April 11, 2025. This acquisition represents a strategic move to expand its product line and market share. From a financial perspective, Ennis maintains a stable position. Despite the recent earnings decline, the company consistently maintains a profit margin of around 10% and has a remarkably low debt-to-equity ratio of 1.38%. Additionally, Ennis pays a quarterly dividend of $0.25 per share, offering a dividend yield of approximately 5.27% at current price levels—potentially attractive to income-oriented investors. EPS projections for fiscal year 2025 stand at $1.55, down from $1.65 in fiscal year 2024. Nevertheless, analysts maintain a 12-month price target of $25.00, suggesting significant upside potential from current levels. Taken together, Michael Schaefer's substantial selling appears more likely related to personal reasons (board resignation) rather than necessarily reflecting negative sentiment about the company's fundamentals. Meanwhile, the CFO's purchase, though limited in size, signals management confidence in the company's value at current price levels. Ennis's stable business model, low debt, attractive dividend yield, and strategic acquisitions present potential positives, though recent underperformance in earnings and revenue declines warrant careful monitoring.

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