The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Callaway Golf Company (NYSE:ELY) and determine whether the smart money was really smart about this stock.
Is Callaway Golf Company (NYSE:ELY) a safe investment right now? The smart money was turning less bullish. The number of bullish hedge fund positions retreated by 1 lately. Callaway Golf Company (NYSE:ELY) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that ELY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 39 hedge funds in our database with ELY holdings at the end of June.
Noam Gottesman of GLG Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to go over the key hedge fund action regarding Callaway Golf Company (NYSE:ELY).
Do Hedge Funds Think ELY Is A Good Stock To Buy Now?
At the end of September, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ELY over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Callaway Golf Company (NYSE:ELY). Fisher Asset Management has a $88.3 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is James Woodson Davis of Woodson Capital Management, with a $42.6 million position; 2.9% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism contain David Steinberg and Eric Udoff’s Marlowe Partners, Seth Rosen’s Nitorum Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Callaway Golf Company (NYSE:ELY), around 20.95% of its 13F portfolio. Stony Point Capital is also relatively very bullish on the stock, earmarking 4.34 percent of its 13F equity portfolio to ELY.
Because Callaway Golf Company (NYSE:ELY) has experienced bearish sentiment from the smart money, it’s safe to say that there exists a select few fund managers who sold off their entire stakes by the end of the third quarter. At the top of the heap, Alexander Mitchell’s Scopus Asset Management sold off the biggest position of all the hedgies monitored by Insider Monkey, worth about $57.3 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund sold off about $19.9 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Callaway Golf Company (NYSE:ELY). These stocks are New Residential Investment Corp (NYSE:NRZ), BWX Technologies Inc (NYSE:BWXT), National Oilwell Varco, Inc. (NYSE:NOV), Unum Group (NYSE:UNM), MAXIMUS, Inc. (NYSE:MMS), NCR Corporation (NYSE:NCR), and American National Group Inc. (NASDAQ:ANAT). All of these stocks’ market caps are closest to ELY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NRZ | 16 | 93063 | -4 |
| BWXT | 17 | 168813 | -3 |
| NOV | 34 | 982583 | 4 |
| UNM | 30 | 350040 | 7 |
| MMS | 14 | 89836 | -12 |
| NCR | 28 | 517584 | -10 |
| ANAT | 16 | 93762 | -4 |
| Average | 22.1 | 327954 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $328 million. That figure was $444 million in ELY’s case. National Oilwell Varco, Inc. (NYSE:NOV) is the most popular stock in this table. On the other hand MAXIMUS, Inc. (NYSE:MMS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Callaway Golf Company (NYSE:ELY) is more popular among hedge funds. Our overall hedge fund sentiment score for ELY is 82.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, ELY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ELY were disappointed as the stock returned -13.6% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Topgolf Callaway Brands Corp. (NYSE:MODG)
Follow Topgolf Callaway Brands Corp. (NYSE:MODG)
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Disclosure: None. This article was originally published at Insider Monkey.
