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Ennis, Inc. has everything going for it. The company recently reported its sixth consecutive earnings surprise, showing fantastic growth. Additionally, Ennis is acquiring new assets and estimates are rising, creating great growth rates as well as valuations.

While Ennis may not operate in the sexiest industry, there is plenty of growth potential here.

Company Description

Ennis makes business forms, uniforms and apparel and other related products. The company has locations all over and serves North America.

A Solid Quarter

Ennis reported second-quarter results on Sep 20 that included earnings per share of 47 cents, topping the Zacks Consensus Estimate by 6 cents. The period marked the sixth consecutive earning surprise. Net earnings for the period rose 27%, to $12.1 million.

Both the top line and margins improved during the period. Sales were up 3.8% to $143 million. Net income was 8.5% of sales, compared to 6.9% of sales a year ago.

M&A Activity

On Sep 30 Ennis announce the acquisition of assets from Atlas Tag & Label. The expansion of the tag and label segment should hit the bottom line within the first full year of operation.

Estimates Jump

The analysts covering EBF raised their full-year estimates following the earnings and acquisition news. EPS is expected to be $1.72, up 8 cents, and good enough for a 26% growth rate. Next year's forecast is $1.87, up 12 cents and represents a 9% growth rate.

Thanks to the higher estimates, the valuations for EBF are even more attractive now. Shares are trading at roughly 10 times forward earnings and with a PEG ratio of just 0.9 times.

The Chart

Shares of EBF surged on the earnings news and continued higher to eventually set a new multi-year high. The stock is on a very nice upward trajectory and, given the valuations, which should continue for the foreseeable future.

Ennis, Inc. - ticker EBF >

Bill Wilton is the Growth Stock Strategist for He is also the Editor in charge of the market-beating Zacks Growth Trader service

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