Callaway Golf (ELY) is a former fad stock of the 1990s when its Big Bertha driver hit the market and was a favorite of every Wall Streeter on the golf course (and in the analyst room). However, the company's fortunes have been well below par for many years. Golf equipment companies such as Nike's (NKE), Mizuno, Cobra and TaylorMade have been able to develop equally excellent products in the last 15 years. Tiger Woods, before he got into his personal problems, had a long-term endorsement deal with Nike.
While golf is still a very active sport across the world, country clubs have been hit hard ever since the financial crisis took place and are struggling to maintain membership. Callaway Golf's revenues have been flat to lower for years and EPS has been negative since 2009. Even if the company posts the modest 18 cent profit that analysts expect in 2012, I do not think that the company is a worthy investment.-- Written by Scott Rothbort in Millburn, N.J.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV