Like a well-hit golf ball sailing through the air toward its destination, Topgolf Callaway Brands (NYSE: MODG) stock was vaulting higher in price this week.
According to data compiled by S&P Global Market Intelligence the sporting goods company’s shares were up by nearly 23% in price week to date as of early Friday morning, thanks in no small part to a series of insider stock buys. The announcement of a new Topgolf facility also helped lift investor sentiment.
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Big insider buys
While no investor should ever buy or sell a company’s shares purely on the basis of insider transactions, often they signal confidence by a person familiar with the business.
Image source: Getty Images.
This was the dynamic with Adebayo Ogunlesi, a member of Topgolf Callaway’s board of directors. After divulging last Friday in a regulatory filing that he had bought 383,701 shares of the company via open-market purchases last week, he made a subsequent disclosure detailing more buys. A filing submitted this past Tuesday itemized three additional purchases totaling 461,583 shares.
Such filings detail only the facts and figures of insider transactions, but do not provide any reasons for such moves — and Ogunlesi has not publicly commented on his purchases. A veteran of the financial services industry, he might consider the stock a fine play in advance of the company’s upcoming spinoff of more than 80% of the Topgolf business.
New Florida facility
Ogunlesi might also be simply buying into Topgolf Callaway’s expansion. On Thursday it announced that it will open its newest Topgolf facility in Florida — marking the 10th one in the state. However this will be the first Topgolf to be located on the Emerald Coast, a stretch of land in the state’s panhandle fronting the Gulf. It’s slated to open on Friday, June 27.
While the director’s moves are certainly bringing attention to the stock, they shouldn’t distract from the always-important fundamentals of the company. Personally I don’t feel golf offers much of a growth opportunity, no matter how well conceived and appealing those Topgolf outlets may be.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Topgolf Callaway Brands. The Motley Fool has a disclosure policy.
