Federal Signal Corp.FSS

Morningstar Rating

Stock Research and Analysis

by Michael Pierson

Federal Signal's restructuring process has helped the company position itself on a better path toward profitability. However, difficult economic circumstances and a lack of a sustainable competitive advantage could significantly impede its journey.

Federal Signal has done an excellent job transforming itself. Read more

Bulls Say

Federal Signal completed the expansion of several production facilities, which should help the company work off its growing backlog.

The acquisition of PIPS exposes Federal Signal to a higher-margin, faster-growing security market.

Opportunity for growth increases as Federal Signal expands its exposure in China, India, and Eastern Europe. Read more

Bears Say

Economic downturns affect Federal Signal's profitability because of its exposure to government and municipal spending.

Firefighters have sued Federal Signal claiming that its sirens have impaired their hearing. Although the company hasn't lost a suit, it faces future litigation expenses as it intends to defend all lawsuits. Read more

Strategy

Federal Signal intends to grow its public safety systems business, expand its production capacity, increase its presence in China, and maintain its market position of number one or number two in most of its markets. Read more

Management

Former CEO Robert Welding resigned in December 2007 after his four-year turnaround efforts. The board appointed James E. Goodwin, who has been on the company's board since 2005, as interim president and CEO until William H. Osborne was appointed in September 2008. Read more

Profile

Federal Signal designs and manufactures products and integrated solutions for municipal, governmental, industrial, and airport customers. Among its products are safety and security systems, aerial devices, street sweepers, industrial vacuums, waterblasters, and sewer cleaners. Read more

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