Paragon Capital Management Ltd Invests $229,000 in BorgWarner Inc. $BWA

Key Points

• Paragon Capital Management Ltd has invested approximately $229,000 in BorgWarner Inc., acquiring 6,848 shares during the 2nd quarter.
• BorgWarner recently announced a $1 billion share repurchase program, indicating management's belief that the stock is undervalued.
• The company increased its quarterly dividend from $0.11 to $0.17, representing a 1.5% annual yield and a payout ratio of 72.34%.

Paragon Capital Management Ltd bought a new position in shares of BorgWarner Inc. (NYSE:BWA - Free Report) in the 2nd quarter, according to the company in its most recent 13F filing with the SEC. The firm bought 6,848 shares of the auto parts company's stock, valued at approximately $229,000.

Several other hedge funds and other institutional investors have also modified their holdings of BWA. LSV Asset Management lifted its position in shares of BorgWarner by 36.7% during the 1st quarter. LSV Asset Management now owns 5,889,080 shares of the auto parts company's stock worth $168,722,000 after buying an additional 1,580,935 shares during the period. Millennium Management LLC lifted its position in shares of BorgWarner by 144.7% during the 1st quarter. Millennium Management LLC now owns 2,009,744 shares of the auto parts company's stock worth $57,579,000 after buying an additional 1,188,466 shares during the period. Leith Wheeler Investment Counsel Ltd. bought a new position in shares of BorgWarner during the 1st quarter worth approximately $28,989,000. Principal Financial Group Inc. lifted its position in shares of BorgWarner by 338.5% during the 1st quarter. Principal Financial Group Inc. now owns 1,085,149 shares of the auto parts company's stock worth $31,090,000 after buying an additional 837,668 shares during the period. Finally, Public Sector Pension Investment Board lifted its position in shares of BorgWarner by 1,121.2% during the 1st quarter. Public Sector Pension Investment Board now owns 693,551 shares of the auto parts company's stock worth $19,870,000 after buying an additional 636,757 shares during the period. Institutional investors own 95.67% of the company's stock.

BorgWarner Stock Up 1.6%

NYSE BWA opened at $44.10 on Friday. The stock has a fifty day moving average of $41.07 and a 200-day moving average of $34.46. The stock has a market capitalization of $9.54 billion, a P/E ratio of 46.92, a price-to-earnings-growth ratio of 1.43 and a beta of 1.09. BorgWarner Inc. has a 52 week low of $24.40 and a 52 week high of $44.70. The company has a debt-to-equity ratio of 0.64, a quick ratio of 1.66 and a current ratio of 2.02.

BorgWarner (NYSE:BWA - Get Free Report) last released its earnings results on Thursday, July 31st. The auto parts company reported $1.21 EPS for the quarter, beating the consensus estimate of $1.06 by $0.15. The company had revenue of $3.64 billion during the quarter, compared to analysts' expectations of $3.56 billion. BorgWarner had a return on equity of 16.17% and a net margin of 1.50%.The business's revenue for the quarter was up 1.0% on a year-over-year basis. During the same period last year, the firm earned $1.19 EPS. BorgWarner has set its FY 2025 guidance at 4.450-4.65 EPS. On average, equities research analysts forecast that BorgWarner Inc. will post 4.28 EPS for the current year.

BorgWarner announced that its Board of Directors has approved a share repurchase program on Thursday, July 31st that authorizes the company to buyback $1.00 billion in shares. This buyback authorization authorizes the auto parts company to repurchase up to 13.2% of its shares through open market purchases. Shares buyback programs are usually an indication that the company's leadership believes its shares are undervalued.

BorgWarner Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, September 15th. Stockholders of record on Tuesday, September 2nd were paid a $0.17 dividend. This is an increase from BorgWarner's previous quarterly dividend of $0.11. The ex-dividend date of this dividend was Tuesday, September 2nd. This represents a $0.68 annualized dividend and a dividend yield of 1.5%. BorgWarner's payout ratio is 72.34%.

Insider Buying and Selling

In related news, Director Alexis P. Michas sold 8,772 shares of BorgWarner stock in a transaction on Tuesday, September 2nd. The stock was sold at an average price of $42.31, for a total transaction of $371,143.32. Following the completion of the sale, the director directly owned 78,903 shares of the company's stock, valued at $3,338,385.93. The trade was a 10.01% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, VP Stefan Demmerle sold 5,000 shares of BorgWarner stock in a transaction on Wednesday, August 13th. The stock was sold at an average price of $40.50, for a total value of $202,500.00. Following the sale, the vice president directly owned 229,040 shares of the company's stock, valued at approximately $9,276,120. This trade represents a 2.14% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 31,272 shares of company stock valued at $1,263,318 over the last three months. Company insiders own 0.45% of the company's stock.

Wall Street Analysts Forecast Growth

BWA has been the subject of several analyst reports. Baird R W upgraded BorgWarner from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, September 3rd. Wall Street Zen upgraded BorgWarner from a "buy" rating to a "strong-buy" rating in a research report on Saturday, July 12th. Barclays reiterated an "overweight" rating and issued a $45.00 price objective (up previously from $42.00) on shares of BorgWarner in a research report on Wednesday, July 16th. UBS Group lifted their price objective on BorgWarner from $35.00 to $38.00 and gave the company a "neutral" rating in a research report on Monday, July 14th. Finally, JPMorgan Chase & Co. lifted their price objective on BorgWarner from $43.00 to $45.00 and gave the company an "overweight" rating in a research report on Monday, August 4th. Two equities research analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating and five have given a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $41.50.

BorgWarner Profile

BorgWarner Inc, together with its subsidiaries, provides solutions for combustion, hybrid, and electric vehicles worldwide. It offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery modules and systems, battery heaters, and battery charging.

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