Having rocketed to a record high this month, Axon Enterprise has grabbed the spotlight, earning a spot on the IBD 50, IBD Big Cap 20, IBD Sector Leaders and IBD Leaderboard. Axon stock also makes the IBD Breakout Stocks Index, joining industry peer Federal Signal.
While Axon has climbed beyond buy range, Federal Signal remains within its buy zone. Plus, the stock has just flashed a telltale signal that could mean it is poised to keep moving higher.
Federal Signal, Axon Lead Powerful Group
Headquartered in Downers Grove, Ill., Federal Signal operates two groups: Environmental Solutions and Safety and Security Systems. Serving municipal, governmental, industrial and commercial customers, the company provides products for warning systems, street sweeping, industrial cleaning, public safety and more.
With a strong 94 Composite Rating, Federal Signal ranks among the leaders in the Security/Safety industry group. Taser maker Axon stock holds the No. 1 spot with the highest-possible score of 99. Showing the power of the group as a whole, the Safety/Security industry ranks a stellar No. 5 among the 197 groups IBD tracks.
While Federal Signal did not join Axon on this month's list of new buys by the best mutual funds, it has flashed signs of demand. In addition to a strong 1.4 up/down volume ratio, the stock has seen four quarters of rising fund ownership. Plus, 40 funds with an A+ or A rating from IBD own shares of Federal Signal.
Over the last eight quarters, Federal Signal has generated earnings growth ranging from 24% to 43%. In the second quarter, the company posted earnings growth of 24% to 88 cents a share. For the full year, analysts expect a 30% rise $3.35 per share.
On the revenue front, sales slipped into the single digits in the third quarter after seven quarters of moderate double-digit gains. Revenue for Q3 rose 6% to $474.2 million.
See Who Joins Federal Signal, Axon On The IBD Breakout Stocks Index
Federal Signal Triggers Positive Reset
While Axon is extended and holding support at its 21-day exponential moving average, Federal Signal remains in buy range after clearing a 95.21 buy point in a double-bottom base.
Another positive is that the new breakout came from a first-stage base. Such early stage patterns have a higher likelihood of success than later-stage formations.
Federal Signal's base is first stage because the low in the new base undercut the low in its prior pattern to reset the base count.
The buy zone for Federal Signal extends up to 99.97. Early Wednesday, the stock trades right around 98.
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