The April Fool
|Written by GSCR Staff|
|Tuesday, 01 April 2014 07:06|
In Monday’s Goldman Guide we got on our soap box a bit to talk about our country, our freedoms, and what to do about it. At the end of the day, we the people need to take a stand and not rely on the government for everything and get involved. Complaining about it will change nothing. Good thing we have sports and stocks to buy in the sports world.
Along those lines and on a lighter fare the same goes with professional sports. Detroit Tigers’ slugger Miguel Cabrera signed a 10-year deal for nearly $300 million late last week. We are free market capitalists here, and do not blame the player himself, but when does it end? Getting paid $30 million per year to hit a baseball is sickening. But again, we have no one to blame but ourselves and we are as guilty as anyone of watching sports on TV and going to games. So either embrace it or quit watching.
Quitting cold turkey this time of year is almost impossible. As we have mentioned in prior years, the next five weeks is arguably the best time of the year in sports. NCAA basketball final four, the start of MLB, the playoff push in the NBA and NHL, The Masters, and capped off with the Kentucky Derby on the first Saturday in May. Maybe we will quit watching next year!
So where is this going in our small cap world? In late May 2013 we highlighted Calloway Golf Company (NYSE – ELY - $10.22) in the Market Monitor and it has steadily climbed 50% since then and is setting new 52-week highs. The stock has been on a steady accumulation run over the last three months with a 21% rise in price with nearly 1 million shares traded per day. Additionally, the Daily Moving average is solidly very bullish for the 50 day signal. We believe ELY will continue this momentum trend to the $11 level over the next month and a half. 2014 could be a really great year as well, as the harsh winter may have a positive impact on revenue as golfers look to get out and play and update equipment. A 7% jump in top line revenue to $900 million in 2014 may be conservative with this consideration, putting the forward P/E even lower than the current 24.
Our price target for 2014 of $13 for ELY could be reached sometime in the fall.
Enjoy the games! Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com
Leave your comments