Overview of the Recent Transaction
On September 30, 2024, Harris Associates L P, a prominent investment firm, executed a significant transaction by acquiring 1,216,118 shares of BorgWarner Inc (BWA, Financial). This addition has increased the firm's total holdings in BorgWarner to 11,839,353 shares, marking a substantial investment move. The shares were purchased at a price of $36.29 each, reflecting a strategic decision by the firm to bolster its portfolio with a stake now representing 5.19% of BorgWarner's outstanding shares and 0.73% of Harris Associates' total portfolio.
Profile of Harris Associates L P
Located at 111 S. Wacker Drive, Chicago, IL, Harris Associates L P is known for its discerning investment philosophy, focusing on intrinsic value and long-term potential. The firm manages a diverse portfolio, with top holdings including Fiserv Inc (FI, Financial), Alphabet Inc (GOOGL, Financial), and Capital One Financial Corp (COF, Financial), among others. With total equity investments amounting to $60.82 billion, Harris Associates is a significant player in the investment community.
Introduction to BorgWarner Inc
BorgWarner Inc, headquartered in the USA, operates as a Tier I auto-parts supplier. The company is divided into three main segments: Air Management, Drivetrain & Battery Systems, and ePropulsion. With a market capitalization of $7.53 billion and a stock price of $34.43, BorgWarner is currently assessed as modestly undervalued with a GF Value of $40.46. The company's largest markets include Europe, Asia, and North America, with significant revenue shares from Ford and Volkswagen.
Analysis of the Trade's Impact
The recent acquisition by Harris Associates L P has not only increased its influence over BorgWarner but also enhanced its portfolio's diversity in the automotive sector. The trade, constituting an increase of 11.45% in their previous holdings, significantly bolsters their position, reflecting a strategic emphasis on BorgWarner's growth and stability in the auto industry.
Market Performance and Valuation of BorgWarner Inc
BorgWarner's stock has seen a year-to-date decline of 4.2% and a decrease of 5.13% since the transaction date. However, the long-term performance since its IPO shows a substantial increase of 1152.56%. The stock's current price-to-GF Value ratio stands at 0.85, indicating it is modestly undervalued, which might have been a key factor in Harris Associates' decision to increase their stake.
Comparative Insights and Other Major Shareholders
Other notable investors in BorgWarner include Oakmark Fund, HOTCHKIS & WILEY, John Rogers (Trades, Portfolio), and Mario Gabelli (Trades, Portfolio), each holding significant stakes and showcasing the stock's popularity among leading investors.
Financial Health and Future Outlook of BorgWarner Inc
BorgWarner's financial health is robust, with a Profitability Rank of 8/10 and a Financial Strength score of 7/10. The company's Piotroski F-Score of 8 indicates healthy conditions, although the Growth Rank is relatively low at 4/10, suggesting areas for potential improvement.
Conclusion
The acquisition of additional shares in BorgWarner by Harris Associates L P aligns with their investment strategy focused on value and long-term growth. This move not only reinforces their portfolio but also positions them to capitalize on BorgWarner's future market performance and financial health. As BorgWarner continues to innovate within the auto-parts sector, Harris Associates' increased stake could yield significant returns, reflecting well on their strategic market insights.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
