Callaway Golf (NYSE:ELY) is in the midst of a significant turnaround, which began when new management, led by Chip Brewer, joined the floundering golf equipment company on March 5, 2012. From that date, the stock outperformed the S&P 500 rising 58% (excluding a modest $0.01/share quarterly dividend) through March 31 of this year. Since then the stock has retraced approximately 22% providing investors who "whiffed" earlier an opportunity to take a mulligan and buy the stock at an attractive level. We are long the stock and recommend purchase with a $12 two-year target price.
Before reviewing the turnaround, we first review what has driven the stock to underperform in the past two months and why we believe investors...
|FREE||SA PRO MEMBERS|
|IDEA GENERATOR||X||Exclusive access to 10 PRO ideas every day|
|INVESTING IDEAS LIBRARY||X||Exclusive access to PRO library of more than 15,000 ideas|
|SECTOR EXPERT NETWORK||X||Exclusive access to all sector experts for direct consultation|
|PERFORMANCE TRACKING||X||Track performance of all PRO stock ideas|
|PROFESSIONAL TOOLS||X||Professional Idea Filters to zero-in based on industry, market cap and more|