That's fiberglass up there. What you're seeing is that the gelcoat behind the letters is still glossy and new, while the gelcoat around it has been sun damaged and turned chalky. Buffing can bring the shine of the dull gelcoat back up and hide the evidence of the old lettering. The hard part is figuring out where to stop.
We don't do the finish repair from sun fading like this. We always warn the customer this will happen after a long time in the sun, and refer them to a paint/body or detail shop to have it done.