BorgWarner (BWA)
has proved to be another interesting company and stock to watch in the
auto/commercial vehicle components sector. Although BorgWarner is
uncommonly well-positioned to benefit from both stricter standards for
internal combustion engines (or “ICE”) and the conversion toward hybrid
and electric vehicles (or EVs), this often seems to be a stock where the
market is looking for an excuse to not like it.
I
thought BorgWarner was a little pricey back in October of 2017, and I
don’t feel like I’ve missed out on much – the shares are down a bit over
that period, while other auto parts companies like Lear (LEA) and Magna (MGA) have produced double-digit returns.
With
healthy content growth pushing revenue growth well ahead of underlying
build rates and reasonably good wins for upcoming hybrid/EV business,
I’m more interested in the valuation and the stock now. I do have some
worries about more challenging comps later in the year, and BorgWarner
doesn’t have as much leverage to future hybrid/EV adoption as some, but I
think this is a stock worth considering today.
Read more here:
BorgWarner Looks Well-Positioned And Undervalued
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