10 Cheap New Stocks To Buy Right Now

4. Phinia Inc. (NYSE:PHIN)

Number of Hedge Fund Holders: 30

Forward P/E ratio as of January 25: 10.67

Market Capitalization: $2.13 billion

Phinia Inc. (NYSE:PHIN) is a tech company that develops and manufactures advanced components and systems for combustion and hybrid propulsion. It serves both automotive and industrial markets and focuses on improving fuel efficiency, reducing emissions, and enhancing performance.

The Aftermarket segment makes up 42% of the company’s sales. This segment provides replacement parts, accessories, and services for vehicles after they have been initially sold by the OEM. The segment saw 6% year-over-year revenue growth in Q3 2024 due to higher pricing and increased volume, particularly in Europe and the Americas. A major reason behind this growth was renewed agreements with major customers, including a top global independent player, and new contracts in Europe and North America. This helps the company capture market share from competitors.

The company plans to expand its Aftermarket offerings, including new products and services, and expand geographically, particularly in emerging markets. Investments in digital technologies like online ordering and inventory management will fuel this growth.

Phinia Inc.’s (NYSE:PHIN) Fuel Systems segment faced challenges due to lower commercial vehicle sales in Europe and China, leading to a 13.7% sales decline. It still maintained 11.4% segment margins through pricing adjustments and cost controls. Voss Capital initiated a long position in the company. The firm believes that its Fuel Systems business is positioned for market share gains in the ICE parts market despite the rise of EVs. It 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)