Here’s What Boosted Federal Signal Corp. (FSS) in Q2

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets made a significant rebound during the quarter, increasing 23% from intra-period lows to close at record highs. Against this backdrop, the fund returned 4.10% (net) compared to the Russell 2500 Growth Index’s 11.31% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Meridian Growth Fund 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 18.16% over the past month and appreciated by 35.16% over the last 12 months. On August 11, 2025, Federal Signal Corporation (NYSE:FSS) stock closed at $126.44 per share, with a market capitalization of $7.687 billion.

Meridian Growth Fund stated the following regarding Federal Signal Corporation (NYSE:FSS) in its second quarter 2025 investor letter:

“Federal Signal Corporation (NYSE:FSS) is a specialty machinery manufacturer that designs and markets sewer cleaners, street sweepers, vacuum trucks, and other purpose-built machines primarily for municipal and other governmental customers. We increased our position significantly when the company’s order flow appeared to bottom out, hitting a metric in our bear investment case. While the stock declined in response, we believed the metric to be misleading and, following additional research, took advantage of depressed prices to build on our position. The stock rallied as production normalized and deliveries accelerated, and we see further upside as innovation and product expansion continue to support growth. During the period, we trimmed the position based on our valuation discipline.”

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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 second quarter were $565 million, up 15% 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 another article, we covered Federal Signal Corporation (NYSE:FSS) and shared Conestoga Capital Advisors’ views on the company. 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.