New Topgolf Callaway Price Target After $2M Insider Buying, Spinoff News
After a year in the rough, Topgolf Callaway has finally landed on the green.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
I’m not exactly a great golfer. For me, golf is the act of awkwardly hitting a ball and then trying to find it.
A few years ago, a Topgolf center opened in my area. I occasionally drop in to hit a bucket of balls during lunchtime. Has my game improved? Not really, but I no longer have to look for the ball. I can see exactly where it lands.
In the Rough
Similarly, shares of Topgolf Callaway Brands MODGF, the world’s largest manufacturer of golf clubs, have performed poorly. Over the past 12 months, Topgolf Callaway shares have lost 44% of their value.
While running scans of bullish stocks after Monday’s close, I was surprised to see Topgolf Callaway on my screen. The stock popped by 8.6% during Monday’s session, breaking out of a bullish technical pattern to reach a four-month closing high.
Major Insider Transactions
The stock is enjoying bullish momentum after word that a company insider recently purchased shares of the Carlsbad, California-based company. Board member Adebayo Ojunlesi purchased about 2.5 million shares of Topgolf Callaway last week, work more than $2 million, according to CNBC.
This stock has gained 13% over the past five sessions, and 20% over the past month. Where are shares of Topgolf Callaway headed next? Let’s go to the charts to find out.
Topgolf Callaway has broken out of a double-bottom pattern (shaded yellow). This formation suggests a change in trend, from bearish to bullish.
Based on the pattern and the stock’s momentum, a target price of $12 seems like a manageable short-term goal. That move would represent a gain of 42% from Monday’s close.
On Monday, Topgolf Callaway closed above its 200-day moving average (red) for the first time since August of last year. It was the highest close for the stock since January of this year.
Spinoff Expected Later This Year
Topgolf Callaway plans to split into two separate companies, via a spin-off of Topgolf into a standalone public company. The deal is expected to be executed in the second half of this year.
Topgolf Callaway shareholders are expected to receive about 80% of the shares of the new Topgolf entity. After several years of struggle for the combined company, the deal will allow both businesses to focus on their respective strengths.
At the time of publication, Ponsi was long MODG.
