TRW (TRW - Get Report) is the rare auto parts supplier that managed to keep making money even when the industry tanked a few years ago. Credit goes to a management team that has focused on cutting-edge products that will always be in demand. Many know that TRW virtually pioneered the airbag industry, cementing its lead into other safety technologies such as collision avoidance systems.
What they may not know is that TRW is also a leading supplier of fuel injection systems. A key reason why so many cars now get more than 30 miles per gallon on the highway is due to extremely precise delivery of fuel into cylinders. TRW is continually advancing these systems to deliver more power with less fuel, which is why industry analysts think we'll see a lot of cars getting 50 miles per gallon on the highway in a few years.As is the case with many industry stocks, TRW posted a hefty rebound after plunging in early 2009. Shares hit almost $60 in the summer of 2011, but are now back down below $45. Shares are quite inexpensive trading at less than seven times projected 2013 profits of $6.50 a share. If auto industry volumes keep rising into 2015, as discussed in this first part of the series, TRW may be looking at EPS approaching $10. TRW is one of the top holdings of Highbridge Capital Management, which owned nearly 3 million shares of the stock as of the most recently reported quarter. I also featured it last month in " 4 Undervalued Stocks in Clint Eastwood's Favorite Sector." Follow @stockpickr