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Brief Commentary On Federal Signal Corporation's (NYSE:FSS) Fundamentals

Simply Wall St

Federal Signal Corporation (NYSE:FSS) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of FSS, it is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Federal Signal here.

Excellent balance sheet with proven track record

FSS delivered a bottom-line expansion of 28% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did FSS outperformed its past performance, its growth also exceeded the Machinery industry expansion, which generated a 19% earnings growth. This is an notable feat for the company. FSS's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that FSS has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. FSS appears to have made good use of debt, producing operating cash levels of 0.39x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NYSE:FSS Income Statement, September 19th 2019

Next Steps:

For Federal Signal, I've compiled three essential aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for FSS’s future growth? Take a look at our free research report of analyst consensus for FSS’s outlook.
  2. Valuation: What is FSS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FSS is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FSS? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.