BorgWarner Inc. (BWA) Rallies with Market

BorgWarner is an Auburn Hills Michigan power train manufacturer that has had recent gains in earnings and sales with the stock close to reaching a new 52 week high just yesterday. A member of the S&P 400 Mid Cap Index, the company has beat earnings estimates its past four quarters and expects sales to increase 34% this year. Analyst have increased their expectations for the current quarter from 48 cents a share to 59 cents a share over the past 90 days.

Estimated earnings for the year have steadily improved also, from $2.39 a share to $2.75 a share this week. The Price to Earnings (P/E) ratio is currently 17.61 which represents a PEG ratio of .58, well below the level where a stock is correctly priced.

The Motely Fool has recently written about the strong market for auto parts in the aftermarket. Advanced Auto Parts, AutoZone, and O Reilly Auto Parts have all performed well recently with car owners fixing their current automobiles instead of purchasing new ones. The article mentions Tenneco (TEN) and BorgWarner (BWA) as being good plays on both the aftermarket and the OEM market.

The options market for BorgWarner is not very active so the best way to play a further rally in the stock is to own the stock itself. Clearstation.com is showing an upward trend in the stock movement and recently gave an additional buy signal on the 9 month chart.