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Ennis Inc. (NYSE:EBF) May 16, 2008 close: $17.48

52-week range: $14.21 [Mar. 17, 2008] - $25.53 [Jun. 19, 2007]

Dividend = $0.155 quarterly – a 3.55% current yield

Ennis produces business forms, promotional apparel, printed advertising specialties, and Post-it notes with promotional messages. This small-cap, business-to-business success story is almost unknown in the investment community despite a history of exceptional long-term growth.

Here are EBF's per share numbers* from the start of FY 2000 [FYs end in February]:

FY………...Sales……Cash Flow..…EPS…...Avg. P/E…..Profit Mgn.……Book Value

2007…...$23.62…….$2.32……..$1.72…...12.4x…….7.3%................$13.58 2006 …..$22.86…….$2.28……..$1.62…...13.2x…….7.1%................$12.37

2005 …..$21.96 ……$2.29……..$1.58…...11.1x…….7.2%................$11.67

2004 …..$14.37 ……$1.31……..$1.19…...15.2x…….6.3%................$10.69

2003 …..$15.82 ……$1.66……..$1.08…...13.1x…….6.9%.................$6.75

2002 …..$14.74……..$1.50…….$0.93…...13.3x…….6.3%………….$5.93

2001 …..$14.56……..$1.55…….$0.92…....9.6x……..5.7%………….$5.90

2000 …..$14.09……..$1.41…….$0.81…....9.3x……..8.6%………….$5.63

………...+ 67.6% …..+ 64.5% …+ 112% ….12.15x …. 6.9%………+ 141.2%
Source: Value Line Small-Cap Edition and MSN Money Central

Pretty nice growth for a company trading at under 10.2x trailing earnings

Ennis closed Friday at $17.48 or 9.65x projected FY 2008 earnings. Even a bounce to its 8-year average P/E of 12.15 would lead to a 12-month target price of $21.99. That's up 25.8% from its current quote. Add in the generous 3.55% yield and EBF shares could easily deliver almost 30% in total return.

Is $22 or better reasonable? Ennis shares actually traded at $25 and $28.45 at its peaks in 2006 and 2007 respectively when are the performance metrics were lower than they are today.

Long-term debt is only 22% of capital. Value Line awards Ennis a B+ financial strength rating. EPS and book value have grown in each year this century.

Since July 13, 2007 there have been 10 insider buys against no sell transactions. CFO Richard Travis Jr. made 9 of these trades at prices from $15.75 - $22.13.

Who else likes Ennis? As of March 31, 2008:

Royce & Associates…………….…owned 9.7%

Dimensional Fund Advisors………owned 6.9%

Dreman Value Mgt………………..owned 4.1%

Vanguard Group ………………….owned 2.6%

Ennis Inc. is a solid growth company at a non-growth multiple. Its dividend is better than most CDs available today. Even a modest regression towards its median valuation metrics should provide a handsome total return.

Disclosure: Author owns shares of Ennis Inc.