EVP Of BorgWarner Makes $407K Sale

Making a noteworthy insider sell on February 12, Tonit M Calaway, EVP at BorgWarner BWA, is reported in the latest SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Calaway sold 13,500 shares of BorgWarner. The total transaction amounted to $407,099.

At Wednesday morning, BorgWarner shares are down by 1.7%, trading at $28.94.

All You Need to Know About BorgWarner

BorgWarner is a tier one supplier of turbo and thermal management technologies, drivetrain systems, powerdrive systems, and battery and charging systems mostly to automotive original equipment manufacturers. Its products aim to move a vehicle with as few electrons as possible, resulting in cleaner, cost-optimized, and more-efficient vehicles. Foundational products, the combustion vehicle business, contributes more than 80% to group revenue while BorgWarner transitions to becoming an electric vehicle-centric parts supplier (e-business). In 2023, 25% of the company's revenue was sourced from Volkswagen and Ford. Revenue is well diversified geographically, with approximately a third each generated in North America, Europe, and Asia.

Understanding the Numbers: BorgWarner's Finances

Decline in Revenue: Over the 3 months period, BorgWarner faced challenges, resulting in a decline of approximately -4.78% in revenue growth as of 30 September, 2024. This signifies a reduction in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Insights into Profitability:

• Gross Margin: The company shows a low gross margin of 18.44%, suggesting potential challenges in cost control and 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 1.04.

Debt Management: With a below-average debt-to-equity ratio of 0.77, BorgWarner adopts a prudent financial strategy, indicating a balanced approach to debt management.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 18.06 is lower than the industry average, implying a discounted valuation for BorgWarner's stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.47, 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): BorgWarner's EV/EBITDA ratio at 6.7 suggests potential undervaluation, falling below industry averages.

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

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The Impact of Insider Transactions on Investments

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

A Deep Dive into Insider Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes 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.

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