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A Mulligan for Callaway?

Tickers in this article: ELY
NEW YORK ( TheStreet) -- As a value investor, I will often revisit names that I've owned before. It could be that I took a position when a company was a compelling buy, then unloaded it when it reached full value.

But a lot can happen; companies can stumble, the market can punish too harshly, or ignore an interesting story. In some cases, if the price is right, I might take a new position in the same name. The honest truth is that sometimes this works out well, and sometimes it does not. I "rediscovered" legendary golf club maker Callaway Golf (ELY) , which I'd previously owned in 2009. Frankly, there was a lot of "rediscovery" happening during that period as the markets mercilessly over-punished a whole host of companies.

In Callaway's case, the punishment, which included a drop from about $14 in September of 2008 to $5 by the following June, was probably well-deserved. Unlike many names, Callaway's stock has not recovered much ground.

After seeing revenue break the $1.1 billion barrier in both 2007 and 2008, the ensuing years have been difficult. The recession took its toll, and a liquidity crisis in the spring of 2009 forced the company into an expensive solution; the issuance of $140 million in 7.5% cumulative preferred stock. Revenue dropped to $968 million by 2010, and this past year to $832 million. While many companies hit hard by the recession have recovered, at least somewhat, Callaway has not had a profitable year since 2008.

As it turns out, I was way too early with this one, having expected a much quicker recovery. When that recovery did not materialize, I gave up on Callaway last summer, after holding for more than two-and-a-half years. I'm patient -- some might say foolish -- but even my patience runs out.

Part of Callaway's barrier to recovery, is the intensely competitive nature of the golf club market. Still, the company remains number one in putter sales and number two in drivers, irons, and woods in U.S. The brand name remains well recognized, yet the financial markets remain unconvinced, at this point, that the company can turn things around. Shares are down about 7% over the past year, but have remained in a fairly tight trading range, between the mid $5s and $8 the past couple of years.

ELY ChartELY data by YCharts
I'm revisiting Callaway yet again, for a couple of reasons. For one, there's fairly new leadership, namely CEO Chip Brewer, formerly of Adams Golf , who has been on the job about a year. Brewer was pretty successful in turning Adams around.

Secondly, I still believe that there's value in the brand itself. With a market cap of less than $500 million, this could be an interesting target for a larger name, seeking to build out its brand portfolio.