BorgWarner Inc (BWA): Today's Featured Consumer Goods Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

BorgWarner ( BWA) pushed the Consumer Goods sector lower today making it today's featured Consumer Goods laggard. The sector as a whole closed the day down 0.4%. By the end of trading, BorgWarner fell $1.16 (-1.6%) to $72.54 on light volume. Throughout the day, 719,681 shares of BorgWarner exchanged hands as compared to its average daily volume of 1.3 million shares. The stock ranged in price between $72.25-$73.28 after having opened the day at $73.21 as compared to the previous trading day's close of $73.70. Other companies within the Consumer Goods sector that declined today were: Frederick's of Hollywood Group ( FOH), down 13.2%, Cereplast ( CERP), down 12.5%, Hyster-Yale Materials Handling ( HY), down 8%, and China Zenix Auto International Ltd ADR ( ZX), down 7.3%.
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BorgWarner Inc. manufactures and sells engineered automotive systems and components primarily for powertrain applications worldwide. The company's Engine segment offers turbochargers, emissions systems, thermal systems, diesel cold start and gasoline ignition technology, and cabin heaters. BorgWarner has a market cap of $8.37 billion and is part of the automotive industry. The company has a P/E ratio of 16.5, equal to the average automotive industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 14.8% year to date as of the close of trading on Friday. Currently there are nine analysts that rate BorgWarner a buy, no analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates BorgWarner as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the consumer goods sector could consider iShares Dow Jones US Cons Goods ( IYK) while those bearish on the consumer goods sector could consider ProShares Ultra Sht Consumer Goods ( SZK).

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