Why Federal Sign's Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Federal Sign jumped as much as 18% today after the company released earnings.

So what: Revenue rose 9% in the second quarter to $222.6 million, beating the $208.8 million estimate from Wall Street. Earnings per share were the big surprise with a jump of 53% to $0.23 versus a $0.14 estimate.

Now what: The environments solutions group and fire rescue group drove the improvement, with safety and security systems falling slightly in the quarter. The good news is that margins are expanding and the company is paying less in interest after refinancing debt earlier this year. I think this earnings beat shows strength going forward and as estimates are revised the 15 forward P/E ratio will come down and the value of the stock will look more attractive.

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The article Why Federal Sign's Shares Jumped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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