|Written by GSCR Staff|
|Wednesday, 06 April 2016 06:53|
As we have opined a lot over the past few years, we are in the midst of one of the best times of the year for sports fans. Monday’s NCAA championship game could not have put a better cap on March Madness. Major League Baseball is now underway. The Kentucky Derby kicking off the horse racing Triple Crown is just over a month away. Finally, Master’s week is here, the first major of the season for golf, and what is considered the unofficial start of golf season for all of us weekend hacks.
Below is the two year chart for Callaway Golf Company (NYSE – ELY - $9.03) which illustrates that the stock is now above the 200-day EMA drawn on the chart. It can be observed that the stock has also had several head and shoulders patterns over this period making it a solid trading vehicle.
ELY 2-Year, 200-Day EMA
In a purely esoteric explanation, we like ELY because golf is now getting some stars again as Tiger Woods and Phil Mickelson fade into the sunset. Some experts believe the field in these events is the deepest it has ever been. The game needs stars to be popular and sell merchandise. More concretely, the forward P/E is 25, half the trailing P/E of 53 on Wall Street forecasts’ for revenue of $870 million this year versus $843 in 2015. Additionally, the Company’s gross margin of 6% is double the industry average of 3%. Also total cash of nearly $50 million versus debt of only $15 million is another positive sign. Finally, back to the technical front, a short float of 2.5% is indicative of the plethora of believers out there.
We like a pop for ELY over the next six months or so as golf season hits full stride. Look for a target of $12. Fore!
Have a great day!
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.ÂÂ
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 THISÂÂ ÂÂ 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