BorgWarner Doing Its Part, But Sentiment Remains Weak

Solid revenue growth, growing margins, and a growing backlog aren't getting it done today for BorgWarner (BWA), which leads to the question of just what exactly it's going to take for investors to want to own vehicle components companies again. Weak production rates and tariff/trade wars don't help sentiment, and rising material costs are still a threat to some extent, but valuations are getting interesting across the space.

As I've said before, stocks don't go up just because they're cheap - valuation alone really isn't much of a catalyst. Accordingly, while I do like BorgWarner both as a company and a stock, I can't say that the shares won't slide another 10% as they have since my last update (when/where I liked the long-term value opportunity). Longer term, I think this is a name to consider, but it will take patience and perhaps management pulling a few rabbits out of its hat at its upcoming September analyst day to get investors interested again.

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BorgWarner Doing Its Part, But Sentiment Remains Weak