Is Federal Signal (NYSE:FSS) moving to revert?


USD 49.41  0.46  0.94%   

As many millenniums are excited about industrials space, it is only fair to sum up Federal Signal Corp against current market trends. As we have suggested previously, Federal Signal is beginning its fall as retail investors shift to be more bearish due to the increased sector volatility. The returns on the market and returns on Federal Signal appear slightly correlated to each other for the last few months. Invariable basic indicators of the enterprise may also connote signals of long-running gains for Federal retail investors. Federal Signal Corp is scheduled to announce its earnings today. The next financial report is expected on the 3rd of May 2022.
Published over six months ago
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The company's average rating is Buy from 6 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Federal Signal market sentiment investors' perception of the future value of Federal. Let us look at a few aspects of Federal technical analysis.
Using predictive technical analysis, we will analyze different prices and returns patterns and diagnose historical swings to determine the real value of Federal Signal. In general, we focus on analyzing Federal Signal stock price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build Federal Signal's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Federal Signal's intrinsic value. In addition to deriving basic predictive indicators for Federal Signal, we also check how macroeconomic factors affect Federal Signal price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Federal Signal's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Federal Signal in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Federal Signal. Your research has to be compared to or analyzed against Federal Signal's peers to derive any actionable benefits. When done correctly, Federal Signal's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Federal Signal.

How does Federal Stands against Peers?

Analyzing Federal Signal competition or peers my help you to expand the diversification possibilities of your existing portfolios and to get a better perspective on locking in new positions. Try to analyze the advantages of investing in traded instruments related to Federal Signal across multiple sectors and thematic ideas. A good competitive analysis can cover a lot of different areas. But what areas to choose depends on who you are. The more exhaustive you are in your analysis, the more effective your competitive analysis will be.
Check out Federal Signal Competition Details

How does Federal utilize its cash?

To perform a cash flow analysis of Federal Signal, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Federal Signal is receiving and how much cash it distributes out in a given period. The Federal Signal cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Federal Signal Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. Federal Signal reported last year Net Cash Flow from Operations of 101.8 Million

Another Deeper Perspective

Federal Signal Corp has a beta of 0.8254. Let's try to break down what Federal's beta means in this case. Federal Signal returns are very sensitive to returns on the market. As the market goes up or down, Federal Signal is expected to follow. The beta indicator helps investors understand whether Federal Signal moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Federal deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. The entity reported the last year's revenue of 1.21 B. Total Income to common stockholders was 107.1 M with profit before taxes, overhead, and interest of 293.6 M.

Our take on Federal Signal small fall

Federal Signal latest mean deviation advances over 1.33. Federal Signal Corp exhibits very low volatility with skewness of -0.56 and kurtosis of 2.03. However, we advise investors to further study Federal Signal Corp technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Federal Signal's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Federal Signal's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Federal Signal Implied Volatility

Federal Signal's implied volatility exposes the market's sentiment of Federal Signal Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Federal Signal's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Federal Signal stock will not fluctuate a lot when Federal Signal's options are near their expiration.

The Current Takeaway on Federal Signal Investment

While many of the other players in the pollution & treatment controls industry are either recovering or due for a correction, Federal Signal may not be performing as strong as the other in terms of long-term growth potentials. To summarize, as of the 2nd of May 2022, we believe that Federal Signal is currently undervalued with low odds of financial distress in the next two years. Our present 90 days recommendation on the enterprise is Strong Buy.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Federal Signal. Please refer to our Terms of Use for any information regarding our disclosure principles.

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