One of the biggest events of the year for sports fans, the Masters, arrives this week.
Spring is in the air, the azaleas are blooming, and a warm sun will be shining down on the golfers and fans descending on Augusta, Ga.
Make no mistake: You won’t be able to turn on the Masters this week and not see this stock’s influence.
As a big believer in behavioral psychology dictating investor actions, this week is going to be absolutely huge.
And it’s not just this week.
The entire month of April is historically quite positive for investors.
From 1950 to 2018, the market has gained 1.33% on average during the month of the Masters.
That is significantly higher than what the market produces during other months.
But the Masters this week will be the biggest catalyst for today’s stock to buy.
In a market that’s fully priced across multiple sectors, it’s rare to find opportunities like the stock that’s in focus this week.
Of course, the Money Morning Stock VQScore™ system scours the universe of publicly traded companies looking for just such opportunities – stocks that can double in value.
This week, we found one that everyone will be watching at the Masters.
This stock has incredible potential, no matter who wins this week’s tournament.
Bank 100% with One of the Biggest Names at the Masters
Today’s stock is Callaway Golf Co. (NYSE: ELY).
Forget about Tiger Woods and Nike at the Masters this week.
The eventual winner of this storied event will be the Callaway brand.
When it comes to players, my money is on last week’s winner of the WGC Dell Technologies Match Play event, Kevin Kisner.
What’s in Kisner’s bag?
Callaway, of course.
To the extent Kisner takes home the Green Jacket awarded to the winner of the Masters, Callaway will get a ton of exposure.
Exposure good enough to propel the stock higher.
According to analysts at Finviz, Callaway is worth $30 per share, or nearly double current levels.
The time to buy Callaway is now.
Shares have gone nowhere so far in 2019.
While the rest of the market is up well over 10%, Callaway shares are flat.
Don’t expect that disparity to continue.
Although analysts expect profits at Callaway to be stagnant this year, growth returns in 2020.
At the moment, expectations call for 16% profit growth that year.
I suspect the number will be even better.
Golf is a discretionary sport. When times are tough, consumers are unlikely to spend as much on recreational activities like golf.
Times are far from tough today.
Unemployment is low and wages are rising, even if the gains are seemingly minimal.
If you can look past the current year, the future is bright for the company.
On average, analysts expect 30% profit growth per annum over the next five years.
That’s how you double your money as an investor.
At current prices, shares of Callaway trade for half that 30% growth rate at 15 times 2019 expected earnings.
Even if you don’t see measurable multiple expansion, the strong profits at Callaway will lift the stock in the next two years.
Owning equity is all about receiving a present value of future cash flows. To the extent those cash flows are growing rapidly as expected at Callaway, outsized returns should follow.
— Jamie Dlugosch
Source: Money Morning