Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

BorgWarner Among The Best-In-Class In Auto Parts

Auto parts supplier BorgWarner (NYSE: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...

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