Back to top

Image: Bigstock

Federated Investors (FII) Is in Oversold Territory: What's Next?

Read MoreHide Full Article

Federated Investors, Inc. has been on a bit of a cold streak lately, but there might be light at the end of the tunnel for this overlooked stock. And for technical investors there is some hope when looking at FII given that, according to its RSI reading of 28.68, it is now in oversold territory.

What is RSI?

RSI stands for ‘Relative Strength Index’ and it is a popular indicator used by technically focused investors. It compares the average of gains in days that closed up to the average of losses in days that closed down; readings above 70 suggest an asset is overbought, while an RSI below 30 suggests undervalued conditions are present.

Other Factors

Yet, FII’s low RSI value isn’t the only reason to have some optimism over a coming turnaround, as there has been plenty of positive earnings estimate revision activity as of late. This is especially true when investors take a deep dive into some of these estimate revision stats and recent changes to Federated Investors’ earnings consensus.

Over the past two months, investors have seen 2 earnings estimate revision move higher, compared with none lower, at least when looking at the key current year time frame. And the consensus estimate for FII has also been on an upward trend over the past 60 days, as estimates have risen from $1.90/share two months ago to just $1.96/share right now.

If this wasn’t enough, Federated Investors also has a Zacks Rank #2 (Buy)which puts it into rare company among its peers. So, given all of these factors, investors may want to consider getting in on this stock now (or holding on), as there are some favorable trends that could bubble up for this stock before long.

Confidential from Zacks

Beyond this Tale of the Tape, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

Published in