A Big Upgrade for Callaway Golf

This bullish call comes from more than just one analyst.

Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks-- and the track records of the firm behind them -- so individuals can make better investing decisions.

In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of the 140,000 members, many of whom are proving to have better investing insight than published analysts do.

More top-performing CAPS members are feeling bullish about Callaway Golf (NYSE: ELY) these days -- the stock started the year at a lowly two-star rank in CAPS and has worked its way up to a more formidable four-stars recently. A total of 239 members have given their opinion on the golf club maker, with many of them offering analysis and commentary explaining the recent optimism.

The troubled economy is squeezing even discount retailers like Costco (Nasdaq: COST) and Target (NYSE: TGT) hard, but many CAPS members believe that the premium Callaway brand of golf equipment will outlast the downturn. Many investors view it as a lasting brand like Nike (NYSE:NKE) or Under Armour (NYSE:UA) -- one that crosses categories well -- rather than a flailing brand such as Crocs (Nasdaq: CROX).

Despite reporting falling revenue during its recent quarter, Callaway was able to gain market share in almost all of its categories and continues to focus on long-term growth. It's made investments for international expansion as it sees opportunities overseas and is seeing strong demand from its uPlay acquisition it made at the end of 2008. The acquisition puts Callaway in the crowded golf handheld GPS device market alongside Garmin (Nasdaq: GRMN), but the uPlay device is claimed to be the only GPS that shows actual aerial imagery.

Callaway's market share gains have several analysts bullish on the stock also, as they see upside potential on margin improvement in its high-margin categories. CAPS members also like the absence of long-term debt on its balance sheet and shares that are selling for far less than book value.

Do you think Callaway deserves its new, higher status? Add your thoughts in the comments box below, or head over to CAPS to rate it yourself. While you're at it, see what the very best CAPS analysts are saying now about the company.

Source