2018 Investment Series Post 17

Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, August 17th.

Callaway Golf Group (ELY)

The seventeenth pick of the Let’s Be Millionaires investment series goes to Callaway Golf Group (ELY).

If you play golf then you’ve likely heard of Callaway. Callaway Golf is one of many names in the golf space with competitors like Nike, Ping, Taylormade and others. Lately though Callaway has been making a splash, stealing market share, and building up a solid ownership stake in TopGolf.

Check out the Callaway website here.

About The Stock

ELY stock has been crushing it lately. A year ago the stock was trading at $13 a share. Today, shares of ELY trade for over $22 a share, or a gain of over 70% from a year ago. The Golf market has been very interesting though over the past few decades and has been struggling to keep the sport active and growing. Looking at the 25 year chart you can see that it has been a bumpy road for ELY up until the surge in price this year. The all time high for ELY of $38 was hit all the way back in 1997 and the stock has not been back since.

Callaway owns around 15% of TopGolf which is great because the company has been booming. TopGolf is re-popularizing the sport in a whole new way that involves fun, food, and beer. The growth of TopGolf is definitely a driving factor in the increase in Callaway Golf’s stock price.

The stock’s P/E ratio is 25 which is an ok P/E in the current market landscape. The market cap is right around 2.15 billion dollars.

This stock could be considered an international, small-cap, consumer discretionary, growth stock.

The Speculation

I think that Callaway can continue to do well in the traditional golf market and take more market share from some of their larger competitors. Even more exciting to me though is their participation in TopGolf. I think TopGolf is opening up a whole new market of golfers and with Callaway being the partner they should be able to expose all of these players to Callaway clubs and balls.

A lot of this choice is based on the TopGolf stake. Right now, buying ELY stock is the only way that the public can invest (albeit indirectly) in TopGolf. Here’s to hoping to see ELY finally set a new all-time high above $38.

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