EBF

Ennis ($EBF) Board Divided: Director Sells $540K While CFO Keeps Buying

10/31/2025 20:35

Conflicting insider trading patterns at Ennis ($EBF) are sending mixed signals to investors, revealing divergent views within the leadership team about this traditional printing company's future prospects. The 114-year-old business forms and printed products manufacturer has witnessed dramatically contrasting trading behaviors among its executives in recent months, highlighting internal disagreements about the company's trajectory. The most striking activity came from Director Michael Schaefer's concentrated selling spree during April and May. Over just two weeks from April 25 to May 5, he disposed of more than 30,000 shares, liquidating approximately $540,000 worth of stock. These transactions, executed at average prices between $17.86 and $18.09 per share, were systematic and deliberate. Notably, this selling occurred as the stock continued its decline from July 2024 highs above $20. In stark contrast, CFO Vera Burnett has been consistently buying. She purchased 498 shares at $19.09 on May 9, followed by another 1,000 shares at $16.51 as recently as October 31. This pattern suggests the executive most familiar with the company's financial position remains optimistic even as shares slide. Director Walter Gruenes reinforced this bullish sentiment with a 5,500-share purchase at $17.99 on July 28. Ennis operates as an industry veteran headquartered in Midlothian, Texas, manufacturing diverse business forms and printed products including snap sets, continuous forms, laser cut sheets, tags, labels, and envelopes. The company markets products under multiple brands like Royal Business Forms, ColorWorx, and VersaSeal, employing approximately 1,856 people. Distribution occurs through business forms distributors, resellers, direct mail services, and commercial printers. Financially, Ennis maintains a remarkably stable structure. Annual revenue of $394.62 million in 2025 declined from $420.10 million in 2024, yet the company sustains a robust balance sheet with virtually no debt and delivers an attractive 6% dividend yield. A current ratio of 3.38 and $65.86 million in operating cash flow demonstrate healthy liquidity. The challenge lies in structural headwinds. The commercial printing industry faces persistent pressure from digital alternatives. Recent quarterly results reflect these difficulties: revenue for the quarter ended May 31, 2025, dropped 5.7% year-over-year to $97.20 million, while earnings per share declined from 41 cents to 38 cents. Though beating analyst expectations of 37 cents, the overall downward trend is unmistakable. Nevertheless, management pursues growth initiatives. Following the June 2024 acquisition of Printing Technologies Inc. (PTI), the company acquired Northeastern Envelope in April 2025. This M&A strategy aims to expand product portfolios and market share. Recent quarters showed $5.5 million in revenue gains from acquisitions, demonstrating some success. Analysts maintain 'strong buy' ratings with $25 price targets, implying roughly 40% upside from current levels. However, this assumes successful navigation of structural challenges. Investors should monitor quarterly revenue trends and acquisition synergy sustainability. If revenue declines persist and M&A growth proves temporary, the current high-dividend policy may become unsustainable. Conversely, successful digital transformation and acquisition synergies would vindicate the CFO's buying conviction. Ultimately, Ennis represents a classic old-economy company at a digital inflection point. While stable cash flows and high dividend yields offer appeal, structural decline pressures pose significant risks. The conflicting insider behaviors perfectly encapsulate this dilemma.