On May 2, a substantial insider purchase was made by Alexis P Michas, Board Member at BorgWarner BWA, as per the latest SEC filing.
What Happened: In a Form 4 filing on Friday with the U.S. Securities and Exchange Commission, it was disclosed that Michas bought 5,814 shares of BorgWarner, amounting to a total of $165,001.
Monitoring the market, BorgWarner‘s shares down by 0.0% at $28.54 during Friday’s morning.
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.
Key Indicators: BorgWarner’s Financial Health
Negative Revenue Trend: Examining BorgWarner’s financials over 3 months reveals challenges. As of 31 December, 2024, the company experienced a decline of approximately -2.36% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Discretionary sector.
Profitability Metrics: Unlocking Value
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Gross Margin: The company faces challenges with a low gross margin of 19.86%, suggesting potential difficulties in cost control and profitability compared to its peers.
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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 at 0.79, reflecting a lower dependency on debt financing and a more conservative financial approach.
Financial Valuation:
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Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 17.51 is lower than the industry average, indicating potential undervaluation for the stock.
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Price to Sales (P/S) Ratio: With a P/S ratio of 0.46 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): BorgWarner’s EV/EBITDA ratio at 6.57 suggests potential undervaluation, falling below industry averages.
Market Capitalization Analysis: The company’s market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.
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Why Insider Activity Matters in Finance
Considering insider transactions is valuable, but it’s crucial to evaluate them in conjunction with other investment factors.
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.
Transaction Codes Worth Your Attention
When analyzing transactions, investors tend to focus on those in the open market, detailed 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.
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