How do we determine whether Callaway Golf Co (NYSE:ELY) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Callaway Golf Co (NYSE:ELY) a healthy stock for your portfolio? Prominent investors are taking a bearish view. The number of long hedge fund bets were cut by 1 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as PROS Holdings, Inc. (NYSE:PRO), Flamel Technologies S.A. (ADR) (NASDAQ:FLML), and Intersect ENT Inc (NASDAQ:XENT) to gather more data points.
Now, we’re going to take a gander at the recent action regarding Callaway Golf Co (NYSE:ELY).
How have hedgies been trading Callaway Golf Co (NYSE:ELY)?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Yost Capital Management, managed by Carson Yost, holds the largest position in Callaway Golf Co (NYSE:ELY). Yost Capital Management has a $25 million position in the stock, comprising 24% of its 13F portfolio. On Yost Capital Management’s heels is Alexander Mitchell of Scopus Asset Management, with a $22.1 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions comprise Peter S. Park’s Park West Asset Management, Kerr Neilson’s Platinum Asset Management and Lee Munder’s Lee Munder Capital Group.
Due to the fact that Callaway Golf Co (NYSE:ELY) has faced declining sentiment from the smart money, it’s safe to say that there were a few hedgies that elected to cut their positions entirely in the third quarter. Intriguingly, Andy Redleaf’s Whitebox Advisors sold off the largest position of the 700 funds watched by Insider Monkey, totaling an estimated $12.2 million in stock. John M. Angelo and Michael L. Gordon’s fund, Angelo Gordon & Co, also sold off its stock, about $5.2 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Callaway Golf Co (NYSE:ELY). These stocks are PROS Holdings, Inc. (NYSE:PRO), Flamel Technologies S.A. (ADR) (NASDAQ:FLML), Intersect ENT Inc (NASDAQ:XENT), and Eastman Kodak Co. (NYSE:KODK). This group of stocks’ market values match ELY’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $145 million in ELY’s case. Intersect ENT Inc (NASDAQ:XENT) is the most popular stock in this table. On the other hand PROS Holdings, Inc. (NYSE:PRO) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Callaway Golf Co (NYSE:ELY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.