StockCall Review on BorgWarner and Lear: Auto Parts Manufacturing Stocks on the Roll

Feb 15, 2013, 08:00 ET from

LONDON, February 15, 2013 /PRNewswire/ --

The auto sector is getting back to its feet and along with it ancillary auto part segment has also been blooming. The increase in auto demand lead to an increase in demand for auto parts as well. The effect is clearly visible on stocks like Lear Corp. (NYSE: LEA) which has shown considerable growth this year. The company also plans to pay higher dividend. However, the story is not same for all auto parts manufacturers. BorgWarner Inc. (NYSE: BWA) has been facing lower demand. However, the company plans to boost its profits by containing its costs.  StockCall analysts initiated preliminary technical research on BorgWarner and Lear Corp. These free reports are accessible by signing today at

BorgWarner Reports Q4 Results

BorgWarner stock appreciated 5 percent so far this year. However, investors can hope to receive a good value for their investment as the company is planning to come up with a stock repurchase program. BorgWarner purchased 1.5 million of its shares during the fiscal fourth quarter and it is likely to continue with the program. The free technical analysis on BorgWarner Inc. is available by signing up at  

For its fiscal fourth quarter, the company earned $1.16 per share in net income. It beat consensus estimate of $1.13 per share. However, its revenue declined 3 percent to $1.72 billion. The company has subdued outlook for the first quarter and it is looking to curtail its production to counter lower demand. This is likely to have adverse impact on its stock price.

BorgWarner is keen to go the M&A route to grow, but it has not been able to finalize the deals. The company attributed the failure to general weakness in the economy. It is also looking to boost its margins in order to improve profitability. The company currently has its operating margin at 10.9 percent. BorgWarner aims to pull the margin up to 11.5 percent or higher.  While the company deals with lower demand, it seeks to cut its costs. The auto part maker's efforts may provide a fillip to its stock price.

Lear Corp. Makes New High

Lear Corp.'s stock is on a bull's run and is trading near its 52-week high. The stock appreciated 17 percent so far this year. It is also seeing increased interest from hedge funds as according to the filed 13Fs, Marcato Capital Management owns over 5 million shares of the firm. Hedge Fund interest is generally a positive sign for the growth of a stock. Register now to download the free research on Lear Corp. at  

Lear is an auto part manufacturing company and it specializes in electric distribution and seat systems. The company increased its fourth quarter revenue by 6 percent. It also expects to earn $4.81 per share in net income for FY2013. The positive outlook ensures that the stock will get to see more upside.

The stock's Price/Earnings ratio is in-line with the industrial average, making it a reasonably priced buy. Lear also offers good dividend as it recently increased its quarterly dividend by 21 percent. It currently pays 17 cents per share every quarter. The company's stock buyback program further adds to the attractiveness of the stock. Lear management has already authorized shares repurchase program worth $1 billion and it plans to buy $600 million worth of stock in 2013 alone. Overall, the stock offers something for everyone. It combines good capital appreciation with healthy dividends.

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