Insider Decision: Tonit M Calaway Offloads $344K Worth Of BorgWarner Stock

Tonit M Calaway, EVP at BorgWarner BWA, reported an insider sell on August 6, according to a new SEC filing.

What Happened: Calaway's recent Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday unveiled the sale of 10,868 shares of BorgWarner. The total transaction value is $344,951.

At Wednesday morning, BorgWarner shares are up by 1.65%, trading at $32.38.

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: Delving into Financials

Decline in Revenue: Over the 3 months period, BorgWarner faced challenges, resulting in a decline of approximately -1.85% in revenue growth as of 30 June, 2024. This signifies a reduction in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Navigating Financial Profits:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 19.01%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): BorgWarner's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 1.34.

Debt Management: BorgWarner's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.64.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 9.57 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.51, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 5.68, BorgWarner could be considered undervalued.

Market Capitalization: Boasting an elevated market capitalization, the company surpasses industry averages. This signals substantial size and strong market recognition.

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The Relevance of Insider Transactions

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Navigating the World of Insider Transaction Codes

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely 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.