TSC Ratings' Updates: BorgWarner

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

The following ratings changes were generated on Tuesday, April 21.

We've upgraded BorgWarner(BWA Quote), which engages in the manufacture and sale of engineered automotive systems and components primarily for power train applications, from sell to hold. Strengths include the company's solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.

BorgWarner's debt-to-equity ratio of 0.4 is below the industry average, implying successful management of debt levels. It's 0.6 quick ratio suggests a possible problem covering short-term cash needs. Revenue fell 32.1% since the same quarter last year, and EPS decreased. Net income fell from $71.2 million to -$81.4 million. Return on equity also decreased, implying weakness within the corporation. BorgWarner's gross profit margin of 14.1% has decreased from the same quarter last year. ...