Back to top

Image: Bigstock

Is BorgWarner (BWA) a Great Value Stock Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is BorgWarner (BWA - Free Report) . BWA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.06 right now. For comparison, its industry sports an average P/E of 17.76. Over the past year, BWA's Forward P/E has been as high as 15.62 and as low as 4.86, with a median of 10.90.

Investors will also notice that BWA has a PEG ratio of 0.95. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BWA's PEG compares to its industry's average PEG of 1.51. Over the last 12 months, BWA's PEG has been as high as 2.81 and as low as 0.69, with a median of 1.44.

We should also highlight that BWA has a P/B ratio of 1.77. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. BWA's current P/B looks attractive when compared to its industry's average P/B of 2.41. Over the past year, BWA's P/B has been as high as 2.09 and as low as 0.84, with a median of 1.63.

Finally, investors should note that BWA has a P/CF ratio of 8.76. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.82. Over the past year, BWA's P/CF has been as high as 10.23 and as low as 3.44, with a median of 7.40.

These figures are just a handful of the metrics value investors tend to look at, but they help show that BorgWarner is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BWA feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


BorgWarner Inc. (BWA) - free report >>

Published in