Trade-Ideas LLC identified Callaway Golf ( ELY) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Callaway Golf as such a stock due to the following factors:

  • ELY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.1 million.
  • ELY has traded 245,382 shares today.
  • ELY is trading at 10.11 times the normal volume for the stock at this time of day.
  • ELY is trading at a new high 7.07% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on ELY:

Callaway Golf Company, together with its subsidiaries, designs, manufactures, and sells golf clubs and balls. It offers drivers, fairway woods, hybrids, irons, wedges, and putters. The stock currently has a dividend yield of 0.5%. ELY has a PE ratio of 12. Currently there are 3 analysts that rate Callaway Golf a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Callaway Golf has been 782,100 shares per day over the past 30 days. Callaway has a market cap of $758.1 million and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.32 and a short float of 2.3% with 1.75 days to cover. Shares are down 11.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Callaway Golf as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ELY's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Leisure Equipment & Products industry. The net income has significantly decreased by 218.9% when compared to the same quarter one year ago, falling from -$1.13 million to -$3.62 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Leisure Equipment & Products industry and the overall market, CALLAWAY GOLF CO's return on equity significantly trails that of both the industry average and the S&P 500.

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