Top-level corporate executives such as CEOs and CFOs have an information advantage over other investors because they have the most up-to-date data on their businesses. If these insiders are buying company stock, it’s generally a bullish development.
In this report, we are going to highlight some buying from top-level insiders at Callaway Golf (ELY:US). Callaway is a leading designer and manufacturer of high-quality golf equipment and apparel. Its brands include Callaway Golf, Topgolf, Odyssey, OGIO, TravisMathew, and Jack Wolfskin. The company is listed on the New York Stock Exchange and currently has a market capitalization of $5.3 billion.
Callaway Golf: Insider Buying
Our data shows that on December 2, both the CEO and CFO of Callaway Golf bought stock. CEO Oliver Brewer purchased 4,000 shares at a price of $25.55 per share, spending $102,199 on stock. Meanwhile, CFO Brian Lynch purchased 15,000 shares at a price of $25.79 per share, spending $386,900 on stock. Combined, these two insiders spent just under half a million dollars on Callaway stock.
Both of these insiders are likely to have a deep level of insight into Callaway’s operations and prospects.
Mr. Brewer has served as President and CEO of Callaway since joining the company in March of 2012. Under his leadership, Callaway has become an industry leader in equipment sales, advanced technologies, and product performance. Before joining Callaway, he was the President and CEO of Adams Golf from January 2002 to February of 2012. He currently serves on the Board of the National Golf Foundation.
Mr. Lynch – who first joined Callaway in 1999 – has served as CFO since July 2017. Previously, he served as the company’s General Counsel and Corporate Secretary before being appointed the additional role of Interim Chief Financial Officer in April 2017 and Chief Financial Officer in July 2017. In his current role, he is responsible for the company’s finance, legal, IT, corporate governance, and compliance functions.
Callaway recently posted record financial results for the third quarter of 2021.
For the period, revenue was up 80.1% year on year to $856.46 million while adjusted EBITDA increased 57% to $139 million. Income from operations amounted to $85 million, versus $70 million a year earlier.
On the back of these strong results, the company increased its full year 2021 revenue guidance to $3,110 to $3,120 million and adjusted EBITDA guidance to $424 to $430 million. Previous guidance was revenue of $3,065 to $3,095 million and adjusted EBITDA of $370 to 390 million.
"Callaway's third quarter performance highlights the significant growth and profitability embedded in our business, as all segments have recovered more quickly than we anticipated and are delivering results ahead of plan," commented Mr. Brewer. “We are committed to driving value for our shareholders and believe our brands are well-positioned to deliver sustainable, long-term growth as we look ahead to 2022 and beyond," he added.
Since these results, a number of brokers have raised their price targets for Callaway Golf. Jefferies has raised its target price to $60 from $49 while Berenberg has raised its target price to $43 from $40.
In light of these developments, we see the insider buying here as a bullish indicator.