Investment Idea - FSS
Federal Signaling Corp., ticker FSS, designs, manufactures, and sells a suite of products and integrated solutions primarily in the United States, Europe, and Canada. The company operates in three segments: Environmental Solutions, Safety and Security Systems, and Fire Rescue. FSS has immense potential, having high barriers of entry, low probably of financial distress, increasing growth, low volatility, increasing momentum and solid fundamentals.
At the time of writing this post, FSS has a P/E of 5.3 (compared to the 20.7 industry average), P/B of 2.5 (compared to the 2.9 industry average), P/S of 1 (compared to the 1.7 industry average), and a PEG ratio of 0.35. In terms of relative valuation, FSS is profoundly cheaper than its comparables. Both its return on equity and return on assets is also higher than the industry average. Upon conducting a 5 year DCF model, an intrinsic value of $17.34 was derived – signifying a 25% potential upside.
In terms of technical indicators, FSS currently has a RSI, relative strength index, of 42 – possibly indicating possible oversold conditions. There appears to be upward momentum and an ascending triangle in formation as well. If FSS breaks 14.4 resistance, the upside could be very profitable.
After reading the 10k reports and researching the company more in depth, I am confident that FSS will be a good and potentially lucrative long position. At the time of writing this post I do not have a position established in FSS, but I will by the end of the week.
why are they mispriced?
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