Investopedia: Should Investors Brake For SORL Auto Parts?

Although there are a few exceptions here and there, it seems safe to say that American investors' indiscriminate obsession with all things China is long past. A spate of accounting scandals reminded investors of the corporate governance risks, while inconsistent (if not outright disappointing) performance dispelled the fantasy that anything Chinese was synonymous with instant growth. SORL Auto Parts (Nasdaq:SORL) saw both the rise and fall of that love affair.

This Chinese commercial brake company saw the occasional run on its shares on the back of breathless "China will change everything" nonsense, but the stock has since come down significantly, as retail investors got bored and issues within the Chinese economy slowed growth. Here and now, though, this may be the sort of obscure stock that patient investors want to check out more thoroughly.

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Investopedia: Industry At A Glance - Auto Parts

It doesn't seem so long ago that investing in anything related to the automotive sector seemed to be an invitation for a capital loss. Companies struggled with excess capacity, high debt and nonviable cost structures, and more than a few companies at least flirted with bankruptcy (and some made the commitment to it).


Now, though, is seems like a new industry. Many companies have worked to strip costs out of their operating structure and emerging markets have become a major growth opportunity. Though investors should not assume that this industry has shaken off its traditional cyclicality, opportunities could still be available in the sector.

BorgWarner (NYSE:BWA)
Auto part companies do not get much credit (or valuation) for technological innovation, but that seems a little unfair in the case of BorgWarner. Diesel turbochargers and dual clutch technology are both significant growth opportunities, particularly if diesel passenger vehicles become as popular in the United States as they are in Europe. BorgWarner used to pay a dividend and that could resume again as the company shores up its balance sheet. Investors should also note that BorgWarner has less exposure to U.S. automakers than many names on this list.



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Investopedia: BorgWarner Is In A Sweet Spot

Better gas mileage and lower emissions is winning combination in the automobile industry these days, and BorgWarner (NYSE:BWA) is one of the companies that makes it happen. Moreover, as more manufacturers and customers look into the potential of turbocharged diesel passenger vehicles, this is a story that could have legs beyond today's car market. BorgWarner isn't the cheapest stock out there, but in an increasingly growth-challenged market, it stands out in many respects. 

Building Momentum in the Second Quarter  
BorgWarner reported strong results for the second quarter, as revenue rose nearly 28% on a GAAP basis and surpassed the average analyst estimate (and came very close to the top of the range). Organic growth was a still-solid 15%. Engine components are the majority of the business at BorgWarner and sales rose 28%. Sales of drivetrain products rose a very similar 29%. Those numbers are quite solid in their own right, but even more so considering that global vehicle production fell about 2% in the period. 


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