Auto parts supplier BorgWarner (BWA)
has a lot working in its favor. A share leader in turbochargers,
BorgWarner has a portfolio of products in turbocharging, timing,
ignition, emission, transmission, and torque transfer that offer OEMs
the opportunity to improve fuel efficiency and lower emissions. The
company also has an uncommonly good record of profitability and cash
flow generation within the auto space, with room to grow from geographic
and end-market expansion.
What BorgWarner doesn't have so much of
is clear undervaluation. I'm not betting against BorgWarner's long-term
success as a company, but today's valuation already seems to factor in
pretty considerable growth and margin improvement from here. I have a
hard time paying a double-digit forward multiple to EBITDA for an auto
parts company (excluding turnarounds/special situations), and I'm
tempted to wait for one of the occasional sizable pullbacks in the
shares.
Follow this link for more:
BorgWarner Among The Best-In-Class In Auto Parts
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