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Are Investors Undervaluing BorgWarner (BWA) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is BorgWarner (BWA - Free Report) . BWA is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.26, while its industry has an average P/E of 17.27. Over the past year, BWA's Forward P/E has been as high as 9.34 and as low as 5.66, with a median of 7.41.
We should also highlight that BWA has a P/B ratio of 1.58. 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. This stock's P/B looks attractive against its industry's average P/B of 3.26. Within the past 52 weeks, BWA's P/B has been as high as 1.58 and as low as 0.93, with a median of 1.21.
Finally, we should also recognize that BWA has a P/CF ratio of 10.64. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 26.72. Over the past 52 weeks, BWA's P/CF has been as high as 10.69 and as low as 4.57, with a median of 6.56.
If you're looking for another solid Automotive - Original Equipment value stock, take a look at Magna International (MGA - Free Report) . MGA is a Zacks Rank of #1 (Strong Buy) stock with a Value score of A.
Shares of Magna International are currently trading at a forward earnings multiple of 8.47 and a PEG ratio of 0.94 compared to its industry's P/E and PEG ratios of 17.27 and 0.92, respectively.
Over the past year, MGA's P/E has been as high as 8.47, as low as 5.65, with a median of 6.79; its PEG ratio has been as high as 0.94, as low as 0.46, with a median of 0.60 during the same time period.
Additionally, Magna International has a P/B ratio of 1.03 while its industry's price-to-book ratio sits at 3.26. For MGA, this valuation metric has been as high as 1.05, as low as 0.71, with a median of 0.93 over the past year.
These are only a few of the key metrics included in BorgWarner and Magna International strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BWA and MGA look like an impressive value stock at the moment.
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Are Investors Undervaluing BorgWarner (BWA) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is BorgWarner (BWA - Free Report) . BWA is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.26, while its industry has an average P/E of 17.27. Over the past year, BWA's Forward P/E has been as high as 9.34 and as low as 5.66, with a median of 7.41.
We should also highlight that BWA has a P/B ratio of 1.58. 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. This stock's P/B looks attractive against its industry's average P/B of 3.26. Within the past 52 weeks, BWA's P/B has been as high as 1.58 and as low as 0.93, with a median of 1.21.
Finally, we should also recognize that BWA has a P/CF ratio of 10.64. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 26.72. Over the past 52 weeks, BWA's P/CF has been as high as 10.69 and as low as 4.57, with a median of 6.56.
If you're looking for another solid Automotive - Original Equipment value stock, take a look at Magna International (MGA - Free Report) . MGA is a Zacks Rank of #1 (Strong Buy) stock with a Value score of A.
Shares of Magna International are currently trading at a forward earnings multiple of 8.47 and a PEG ratio of 0.94 compared to its industry's P/E and PEG ratios of 17.27 and 0.92, respectively.
Over the past year, MGA's P/E has been as high as 8.47, as low as 5.65, with a median of 6.79; its PEG ratio has been as high as 0.94, as low as 0.46, with a median of 0.60 during the same time period.
Additionally, Magna International has a P/B ratio of 1.03 while its industry's price-to-book ratio sits at 3.26. For MGA, this valuation metric has been as high as 1.05, as low as 0.71, with a median of 0.93 over the past year.
These are only a few of the key metrics included in BorgWarner and Magna International strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BWA and MGA look like an impressive value stock at the moment.