Stock Analysis

BorgWarner Inc.'s (NYSE:BWA)) market cap declines to US$7.8b but insiders who sold US$1.5m stock were able to hedge their losses

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NYSE:BWA
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Over the past year, insiders sold US$1.5m worth of BorgWarner Inc. (NYSE:BWA) stock at an average price of US$41.49 per share allowing them to get the most out of their money. After the stock price dropped 11% last week, the company's market value declined by US$950m, but insiders were able to mitigate their losses.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for BorgWarner

BorgWarner Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive VP, Tonit Calaway, for US$706k worth of shares, at about US$40.27 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$32.97). So it may not tell us anything about how insiders feel about the current share price.

Insiders in BorgWarner didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:BWA Insider Trading Volume September 26th 2022

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.6% of BorgWarner shares, worth about US$47m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About BorgWarner Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by BorgWarner insiders. The modest level of insider ownership is, at least, some comfort. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 2 warning signs for BorgWarner that deserve your attention before buying any shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

Valuation is complex, but we're helping make it simple.

Find out whether BorgWarner is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About NYSE:BWA

BorgWarner

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation5
Future Growth3
Past Performance5
Financial Health5
Dividends3

Read more about these checks in the individual report sections or in our analysis model.

Undervalued with solid track record.