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Are Conglomerates Stocks Lagging Federal Signal (FSS) This Year?

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For those looking to find strong Conglomerates stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Federal Signal (FSS - Free Report) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Conglomerates sector should help us answer this question.

Federal Signal is a member of the Conglomerates sector. This group includes 21 individual stocks and currently holds a Zacks Sector Rank of #10. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Federal Signal is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for FSS' full-year earnings has moved 1% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the latest available data, FSS has gained about 1.6% so far this year. Meanwhile, the Conglomerates sector has returned an average of 1.1% on a year-to-date basis. This means that Federal Signal is outperforming the sector as a whole this year.

Hitachi Ltd. (HTHIY - Free Report) is another Conglomerates stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 12.6%.

Over the past three months, Hitachi Ltd.'s consensus EPS estimate for the current year has increased 8%. The stock currently has a Zacks Rank #1 (Strong Buy).

Breaking things down more, Federal Signal is a member of the Diversified Operations industry, which includes 21 individual companies and currently sits at #134 in the Zacks Industry Rank. On average, this group has gained an average of 1.1% so far this year, meaning that FSS is performing better in terms of year-to-date returns. Hitachi Ltd. is also part of the same industry.

Federal Signal and Hitachi Ltd. could continue their solid performance, so investors interested in Conglomerates stocks should continue to pay close attention to these stocks.


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