Is Callaway Golf Co (NYSE:ELY) a bargain? Money managers are turning less bullish. The number of long hedge fund bets went down by 2 lately.
At the moment, there are tons of gauges market participants can use to monitor the equity markets. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform their index-focused peers by a solid amount (see just how much).
Equally as integral, optimistic insider trading sentiment is a second way to parse down the financial markets. Obviously, there are a number of reasons for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this strategy if shareholders understand where to look (learn more here).
Now, it's important to take a look at the latest action regarding Callaway Golf Co (NYSE:ELY).
In preparation for this quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -18% from the previous quarter. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.
According to our comprehensive database, Chuck Royce's Royce & Associates had the biggest position in Callaway Golf Co (NYSE:ELY), worth close to $25.7 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Ric Dillon of Diamond Hill Capital, with a $9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Youlia Miteva's Proxima Capital Management, John W. Rogers's Ariel Investments and Jim Simons's Renaissance Technologies.
Since Callaway Golf Co (NYSE:ELY) has experienced a declination in interest from the aggregate hedge fund industry, it's easy to see that there exists a select few hedgies who sold off their positions entirely at the end of the first quarter. It's worth mentioning that Mike Vranos's Ellington dropped the largest investment of the "upper crust" of funds we track, valued at close to $0.2 million in stock., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund dumped about $0.2 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds at the end of the first quarter.
Insider trading activity, especially when it's bullish, is best served when the company in question has seen transactions within the past six months. Over the latest half-year time period, Callaway Golf Co (NYSE:ELY) has seen 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results shown by our research, retail investors must always pay attention to hedge fund and insider trading activity, and Callaway Golf Co (NYSE:ELY) shareholders fit into this picture quite nicely.