Michael S Hanley's Recent Buy: Acquires $165K In BorgWarner Stock

A new SEC filing reveals that Michael S Hanley, Director at BorgWarner BWA, made a notable insider purchase on May 2,.

What Happened: In a Form 4 filing on Friday with the U.S. Securities and Exchange Commission, it was disclosed that Hanley bought 5,814 shares of BorgWarner, amounting to a total of $165,001.

BorgWarner's shares are actively trading at $29.01, experiencing a up of 1.65% during Friday's morning session.

Discovering BorgWarner: A Closer Look

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.

Understanding the Numbers: BorgWarner's Finances

Revenue Growth: BorgWarner's revenue growth over a period of 3 months has faced challenges. As of 31 December, 2024, the company experienced a revenue decline of approximately -2.36%. This indicates a decrease in the company's 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.

Interpreting Earnings Metrics:

• Gross Margin: The company shows a low gross margin of 19.86%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): BorgWarner's EPS is below the industry average. The company faced challenges with a current EPS of -1.852107. This suggests a potential decline in earnings.

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.

Insights into Valuation Metrics:

• Price to Earnings (P/E) Ratio: BorgWarner's P/E ratio of 17.51 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The P/S ratio of 0.46 is lower than the industry average, implying a discounted valuation for BorgWarner's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 6.57, BorgWarner presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

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Illuminating the Importance of Insider Transactions

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Unlocking the Meaning of Transaction Codes

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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.