Director Of BorgWarner Purchased $165K In Stock

A new SEC filing reveals that Hau N. Thai-Tang, Director at BorgWarner BWA, made a notable insider purchase on May 2,.

What Happened: Thai-Tang's recent move, as outlined in a Form 4 filing with the U.S. Securities and Exchange Commission on Friday, involves purchasing 5,814 shares of BorgWarner. The total transaction value is $165,001.

Monitoring the market, BorgWarner's shares up by 1.65% at $29.01 during Friday's morning.

Delving into BorgWarner's Background

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.

BorgWarner's Economic Impact: An Analysis

Revenue Challenges: BorgWarner's revenue growth over 3 months faced difficulties. As of 31 December, 2024, the company experienced a decline of approximately -2.36%. This indicates a decrease in 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.

Evaluating Earnings Performance:

• Gross Margin: With a low gross margin of 19.86%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): With an EPS below industry norms, BorgWarner exhibits below-average bottom-line performance with a current EPS of -1.852107.

Debt Management: BorgWarner's debt-to-equity ratio is below the industry average. With a ratio of 0.79, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: BorgWarner's P/E ratio of 17.51 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.46, 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): BorgWarner's EV/EBITDA ratio, lower than industry averages at 6.57, indicates attractively priced shares.

Market Capitalization Analysis: Above industry benchmarks, the company's market capitalization emphasizes a noteworthy size, indicative of a strong market presence.

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Why Pay Attention to Insider Transactions

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

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

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Cracking Transaction Codes

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.

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