Callaway's Management Team Is Buying Shares. Should You?

Last week, golf equipment maker Callaway Golf (NYSE: ELY) announced that the chief executive officer and chief financial officer had purchased shares of the company for their own personal accounts. Since insider buying tends to signal that management believes its shares are undervalued, the market reacted positively to the news -- its shares jumped more than 5% the next day. 

But before investors blindly follow management's actions, let's take a deeper look. 

A Topgolf driving range. Image source: Getty Images

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Source Fool.com