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BorgWarner (BWA) Fell After Reduced 2023 Sales Guidance

Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, its Investor Class fund ARTQX returned 11.21%, Advisor Class fund APDQX posted a return of 11.20%, and Institutional Class fund APHQX returned 11.17%, compared to a 12.11% return for the Russell Midcap Value Index. For the full year, ARTQX, APDQX, and APHQX returned 18.15%, 18.25%, and 18.35%, respectively, compared to 12.71% for the index. The portfolio did well in the market with double-digit gains but trailed the Russell Midcap Value Index in Q4. However, it outperformed in the prior three quarters, leading to strong results compared to the index and peer group for 2023. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Artisan Mid Cap Value Fund featured stocks like BorgWarner Inc. (NYSE:BWA) in its Q4 2023 investor letter. Headquartered in Auburn Hills, Michigan, BorgWarner Inc. (NYSE:BWA) offers solutions for combustion, hybrid, and electric vehicles. On March 26, 2024, BorgWarner Inc. (NYSE:BWA) stock closed at $33.65 per share. One-month return of BorgWarner Inc. (NYSE:BWA) was 9.32%, and its shares lost 20.55% of their value over the last 52 weeks. BorgWarner Inc. (NYSE:BWA) has a market capitalization of $7.772 billion.

Artisan Mid Cap Value Fund stated the following regarding BorgWarner Inc. (NYSE:BWA) in its fourth quarter 2023 investor letter:

"Shares of BorgWarner Inc. (NYSE:BWA), a tier-one auto parts supplier, have been stuck in neutral. Despite a solid earnings report, investors were spooked by reduced 2023 sales guidance in its electric products “eProducts” business given existing concerns about a broader slowdown in EVs (electric vehicles). However, the new guidance for eProducts still represents 30%+ growth versus FY22, and the majority of BorgWarner’s total sales remain in its legacy ICE (internal combustion engine) business, where it has a dominant position in the highly profitable and free cash flow generative turbocharger business. Navigating the ongoing transition from ICE vehicles to EVs is an ongoing balance between R&D spend to support new product development and maintaining profitability, but at the current depressed valuation (<8X 2024 estimated earnings), we believe the risk-reward for shareholders looks favorable.><8X 2024 estimated earnings), we believe the risk-reward for shareholders looks favorable."

Workers assembling a state-of-the-art engine in a modern auto factory.

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BorgWarner Inc. (NYSE:BWA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, BorgWarner Inc. (NYSE:BWA) was held by 25 hedge fund portfolios, compared to 25 in the previous quarter, according to our database.

We discussed BorgWarner Inc. (NYSE:BWA) in another article and shared Ariel Appreciation Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.