1. Phinia Inc. (NYSE:PHIN)
Forward P/E Ratio as of March 19: 9.71
Market Capitalization as of March 19: $1.80 billion
Number of Hedge Fund Holders: 37
Phinia Inc. (NYSE:PHIN) develops and manufactures integrated components and systems. It operates through Fuel Systems and Aftermarket segments. It provides advanced fuel injection systems and aftermarket solutions for vehicles and industrial applications. It enhances fuel efficiency and reduces emissions for both traditional and hybrid technologies.
The company’s Aftermarket segment experienced a 4.9% year-over-year increase in sales in Q4 2024, which was fueled by higher volumes and favorable pricing across all regions. In 2024, the company expanded its aftermarket offerings by introducing over 3,600 new SKUs. The Aftermarket segment also secured new business wins, which included contracts with major customers in Europe, South America, and Southeast Asia. A multi-year contract to supply remanufactured products to a major Commercial Vehicle OEM in South America and the development of new distributor relationships in Southeast Asia are key initiatives to drive further growth.
Although the Aftermarket segment’s margin decreased by 1.4% in Q4, ending at 14.9%, due to increased freight and other charges, the overall performance remained robust. Phinia Inc. (NYSE:PHIN) plans to continue focusing on growing its Aftermarket business. The company will use its human and manufacturing capital efficiently while maintaining a financially disciplined approach.
Voss Capital sees the company as an auto parts supplier with substantial market share potential in its fuel systems business. Overblown EV penetration concerns present a favorable environment as well. Voss Capital stated the following regarding Phinia Inc. (NYSE:PHIN) in its Q3 2024 investor letter:
“We are long shares of PHINIA Inc. (NYSE:PHIN). A recent spin-off from Borg Warner (BWA), the company is an auto parts supplier that operates two distinct businesses – 1) Fuel Systems (original equipment manufacturer supplier) and 2) Aftermarket automotive products supplier.
The Fuels Systems business is uniquely positioned to capitalize on attractive competitive dynamics that we believe will allow the company to take gobs of market share in its niche markets over the coming years. As an internal combustion engine (ICE) parts supplier pure play, overly hyped expectations of electric vehicle (EV) penetration created an especially good long-term buying opportunity in PHIN earlier in the year…” (Click here to read the full text)
While we acknowledge the growth potential of Phinia Inc. (NYSE:PHIN), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PHIN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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