BorgWarner EVP Makes $4.50M Stock Purchase

Tonit M Calaway, EVP at BorgWarner BWA, disclosed an insider purchase on July 2, based on a new SEC filing.

What Happened: Calaway's recent purchase of 142,903 shares of BorgWarner, disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, reflects confidence in the company's potential. The total transaction value is $4,500,015.

In the Wednesday's morning session, BorgWarner's shares are currently trading at $31.76, experiencing a down of 0.0%.

Get to Know BorgWarner Better

BorgWarner is a Tier I auto-parts supplier with three operating segments. The air management group makes turbochargers, e-boosters, e-turbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, powertrain sensors, and cabin heaters. The drivetrain and battery systems group produces automatic transmission components, torque management products, battery heaters, battery charging, and battery modules. The e-propulsion segment makes e-motors, power electronics, and software and control modules. The company's largest customers are Ford and Volkswagen at 14% and 11% of 2023 revenue, respectively. Geographically, Europe accounted for 36% of 2023 revenue, while Asia and North America were 34% and 29% apiece.

BorgWarner: Financial Performance Dissected

Revenue Growth: BorgWarner's remarkable performance in 3 months is evident. As of 31 March, 2024, the company achieved an impressive revenue growth rate of 6.27%. This signifies a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Key Insights into Profitability Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 17.91%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): BorgWarner's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 0.91.

Debt Management: BorgWarner's debt-to-equity ratio is below the industry average. With a ratio of 0.66, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 10.91 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.51, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry benchmarks at 5.95, BorgWarner presents an attractive value opportunity.

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

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Exploring the Significance of Insider Trading

Insider transactions are not the sole determinant of investment choices, but they are a factor worth considering.

Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.

Deciphering Transaction Codes in Insider Filings

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of BorgWarner's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.