Stocks & Investing
Mon, August 22, 2011Fri, August 19, 2011WBC, DAN, FDML, STRT, BWA, CYD, Auto/Truck - OEM Stocks Undervalued
Published in Stocks and Investing on Monday, August 22nd 2011 at 6:31 GMT by WOPRAI
August 22, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Auto/Truck - OEM sector and these stocks are the most undervalued as of today. WABCO HOLDINGS INC (NYSE:WBC), DANA HOLDING CORP (NYSE:DAN), FEDERAL-MOGUL CORP (NASDAQ:FDML), STRATTEC SECURITY CORP (NASDAQ:STRT), BORGWARNER INC (NYSE:BWA), CHINA YUCHAI INTL LTD (NYSE:CYD) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
WBC WABCO HOLDINGS INC 40.29 62.69 35.70% Undervalued Auto/Truck - OEM
DAN DANA HOLDING CORP 11.39 19.88 42.70% Undervalued Auto/Truck - OEM
FDML FEDERAL-MOGUL CORP 14.87 25.72 42.20% Undervalued Auto/Truck - OEM
STRT STRATTEC SECURITY CORP 23 37.89 39.30% Undervalued Auto/Truck - OEM
BWA BORGWARNER INC 63.44 90.34 29.80% Undervalued Auto/Truck - OEM
CYD CHINA YUCHAI INTL LTD 15.6 28.53 45.30% Undervalued Auto/Truck - OEM
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
WABCO HOLDINGS INC (NYSE:WBC) - WABCO Holdings Inc. develops, manufactures, and sells braking, stability, suspension, and transmission control systems primarily for commercial vehicles. It produces pneumatic anti-lock braking systems, electronic braking systems, automated manual transmission systems, air disk brakes, and an array of conventional mechanical products, such as actuators, air compressors, and air control valves. The company also supplies electronic suspension controls and vacuum pumps to the car and sport utility vehicle (SUV) markets. In addition, it provides replacement parts, diagnostic tools, training, and other services to commercial vehicle aftermarket distributors, repair shops, and fleet operators. The company principally serves customers include truck and bus original equipment manufacturers. Its customers also comprise commercial vehicle aftermarket distributor network that provides replacement parts to commercial vehicle operators; trailer manufacturers; and car and SUV manufacturers. The company markets its products through a global sales force. WABCO Holdings sells its products primarily in Europe, the Americas, and Asia. The company was founded in 1869 and is headquartered in Piscataway, New Jersey.
DANA HOLDING CORP (NYSE:DAN) - Dana Holding Corporation engages in the design, manufacture, and supply of products for vehicle manufacturers worldwide. It offers light axles, drive shafts, structural products, sealing products, thermal products, and related service parts for light trucks, sport utility vehicles, crossover utility vehicles, vans, and passenger cars. The companys products also include chassis and side rails, ride controls and related modules and systems, engine sealing products, thermal products, and related service parts for medium- and heavy-duty trucks, buses, and other commercial vehicles. In addition, it offers transaxles, drive shafts, suspension components, transmissions, related modules and systems, sealing products, and electronic controls for construction machinery, leisure/utility vehicles, and various non-vehicular industrial applications, as well as for outdoor power, agricultural, mining, forestry, and material handling equipment. Dana Holding Corporation offers its products primarily under the Spicer, Victor Reinz, Parish, and Long brand names. The company was founded in 1904 and is headquartered in Maumee, Ohio.
FEDERAL-MOGUL CORP (NASDAQ:FDML) - Federal-Mogul Corporation manufactures and distributes parts, components, modules, and systems to customers in the automotive, small engine, heavy-duty, marine, railroad, aerospace, and industrial markets worldwide. It operates primarily through four segments: Powertrain Energy, Powertrain Sealing and Bearings, Vehicle Safety and Protection, and Global Aftermarket. The Powertrain Energy segment offers pistons, piston rings, piston pins, cylinder liners, valve seats and guides, and ignition products used in automotive, light truck, heavy-duty, industrial, marine, agricultural, power generation, and small air-cooled engine applications. The Powertrain Sealing and Bearings segment provides dynamic seals, bonded piston seals, combustion and exhaust gaskets, static gaskets and seals, rigid heat shields, engine bearings, industrial bearings, bushings and washers, sintered engine and transmission components, and metallic filters for engine, transmission, and driveline systems. The Vehicle Safety and Protection segment supplies protection products, including brake disc pads, brake linings, brake blocks, element resistant systems, protection sleeving products, flexible heat shields, brake system components, chassis products, windshield wipers, fuel pumps, and lighting products used in the automotive, motorcycle, heavy-duty, commercial/industrial, aerospace, railway, and consumer products markets. The Global Aftermarket segment offers aftermarket products to the independent automotive, heavy-duty, and commercial/industrial replacement markets through the operation of distribution facilities. The company was founded in 1899 and is headquartered in Southfield, Michigan. Federal-Mogul Corporation operates as a subsidiary of Icahn Sourcing LLC.
STRATTEC SECURITY CORP (NASDAQ:STRT) - STRATTEC SECURITY CORPORATION engages in the design, development, manufacture, and marketing of automotive security products. Its product line includes mechanical locks and keys, electronically enhanced locks and keys, steering columns, and instrument panel ignition lock housings; and access control products, such as latches, power lift gate systems, power deck lid systems, door handles, and related access control products for automotive customers. The company also designs, develops, tests, manufactures, markets, and sells power systems to operate vehicle sliding side doors and rear compartment access points, such as liftgates and trunk lids, as well as offers power cinching latches and cinching strikers used in these systems. In addition, it provides aftermarket support services. The company offers its products to OEM auto and light truck manufacturers, as well as other transportation-related manufacturers in the United States, Canada, Mexico, Europe, South America, Korea, and China. STRATTEC SECURITY CORPORATION was founded in 1994 and is headquartered in Milwaukee, Wisconsin.
BORGWARNER INC (NYSE:BWA) - BorgWarner Inc., together with its subsidiaries, engages in the manufacture and sale of engineered automotive systems and components primarily for power train applications worldwide. It operates in two segments, Engine and Drivetrain. The Engine segment offers turbochargers, chain products, emissions systems, thermal systems, diesel cold start and gasoline ignition technology, and diesel cabin heaters. It also manufactures electric air pumps, turbo actuators, and exhaust gas recirculation valves. This segments chain and chain systems include timing chain and timing drive systems, variable cam timing systems, crankshaft and camshaft sprockets, tensioners, guides, snubbers, front-wheel drive transmission chain and four-wheel drive chain, and chain systems for light-vehicle and commercial-vehicle applications. In addition, the Engine segment offers viscous fan drives and polymer fans. The Drivetrain segment offers friction and mechanical products, which include dual clutch modules, friction clutch modules, friction plates, transmission bands, torque converter clutches, one-way clutches, and torsional vibration dampers. It also provides control products comprising electro-hydraulic solenoids for standard and high pressure hydraulic systems, transmission solenoid modules, and dual clutch control modules. In addition, this segment offers torque management products that include rear-wheel drive (RWD)/all-wheel drive (AWD) transfer case systems, FWD/AWD electromagnetic coupling systems, and advanced products. The company sells its products primarily to original equipment manufacturers (OEMs) of light vehicles, such as passenger cars, sport-utility and cross-over vehicles, vans, and light trucks; OEMs of commercial trucks, buses, and agricultural and off-highway vehicles; and other Tier One vehicle systems suppliers, and the aftermarket for light and commercial vehicles. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan.
CHINA YUCHAI INTL LTD (NYSE:CYD) - China Yuchai International Limited, through its subsidiaries, manufactures and sells diesel and natural gas engines in China and internationally. The companys engines are used in light, medium, and heavy-duty vehicles, as well as in generator sets, marine, and industrial applications. It also offers diesel power generators that are used in the construction and mining industries; special vehicles, which include waste transfer equipment, construction dumptrucks, demountable carriage dumptrucks, and pendular dumptrucks; and diesel engine parts. The company distributes its products directly to auto plants and agents. The company was founded in 1951 and is based in Singapore, Singapore.
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