Federal Signal Corp. (FSS) Rose on Robust Results

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Small Cap Composite returned 4.76% in the quarter compared to 11.97% for the Russell 2000 Growth Index. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Federal Signal Corporation (NYSE:FSS). Federal Signal Corporation (NYSE:FSS) is a U.S.-based company that provides products and integrated solutions for municipal, governmental, industrial, and commercial customers. Federal Signal Corporation (NYSE:FSS) shares returned 2.90% over the past month and appreciated by 8.24% over the last 12 months. On July 24, 2025, Federal Signal Corporation (NYSE:FSS) stock closed at $107.48 per share, with a market capitalization of $6.553 billion.

Conestoga Capital Advisors stated the following regarding Federal Signal Corporation (NYSE:FSS) in its second quarter 2025 investor letter:

“Federal Signal Corporation (NYSE:FSS): Founded in 1901, FSS is a leading manufacturer of specialized vehicles for maintenance and infrastructure markets (street sweeping, sewer cleaning, hydro excavation, dump trucks, etc.) and safety and security systems (outdoor warning sirens, emergency vehicle lighting, etc.) FSS reported a strong quarter, highlighted by solid organic revenue growth and much stronger than expected orders. Management continues to see a robust demand environment, which they will be better positioned to meet as production rates increase.”

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A control center equipped with the company’s camera systems, vehicle lightbars, industrial signaling equipment, and first responder interoperable communications.

Federal Signal Corporation (NYSE:FSS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held Federal Signal Corporation (NYSE:FSS) at the end of the first quarter compared to 29 in the previous quarter. Federal Signal Corporation’s (NYSE:FSS) consolidated net sales for the first quarter were $464 million, up 9% compared to last year. While we acknowledge the risk and potential of Federal Signal Corporation (NYSE:FSS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Federal Signal Corporation (NYSE:FSS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.