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Golf stocks: The silver lining for Covid golf ⛳


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While we scramble for tee times and count the minutes till sundown while we're on 16, the good news is that golf stocks are paying dividends (figuratively as all monies are reinvested) in a big way. Record golf sales this holiday season were reported as Junior and Bubba unwrapped their new golf bags and drivers. Calloway and Acushnet are hitting new highs each day. Aside from the benefits of stock ownership, what do you think this huge influx of cash will mean over the next few years for us? Cheaper equipment? Inovation?  More suppliers/competition?

Edited by pktaske
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It will mean nothing for the consumer except higher prices and more marketing nonsense hype.   Nothing gets better.   Everything only gets worse because people are more greedy than

This will help insure a better supply of lower priced, good quality used equipment in the coming years. 

I doubt this is sustainable. I mean as OP says there is a clear reason for this. Given the likelihood that more sports will be do-able this summer and going forward, i imagine it will be somewhat of a

Well there is no "huge influx of cash" or assets unless these companies do secondary offerings or use their stock to make acquisitions (as Callaway did for the rest of TopGolf). The big story will be whether TopGolf will continue on its trajectory and become a $10 billion+++ business or whether it will flop (and likely take the entire company down with it). It will be interesting to see.

 

Oh and the margins on golf gear continue to shrink every year. Titleist's golf ball moat is safe for now, but people are starting to realize that there's not much innovation lately and upstarts like Costco are eating away at the bottom line. IMHO Callaway had to make the TopGolf deal because I don't think they have a future as a golf equipment supplier.

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Less than a year ago it was at a record or near record low, a year ago it was not too far behind where it is now, but it's definitely at a record high at this moment but volatile in a way? Top Golf deal took it down in a big hurry less than a couple months ago so my totally uninformed can't buy or sell stocks over the phone speculation is the above post is correct - hitched its star to Top Golf performance.  Who knows how the you know what and any gains in participation will play out - history wouldn't suggest much real positive gains in a sustained way, guessing 2-5 years will tell the tale on that end of it whether outside or inside?

 

Interesting.

 

 

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7 hours ago, Soloman1 said:

It will mean nothing for the consumer except higher prices and more marketing nonsense hype.

 

Nothing gets better.

 

Everything only gets worse because people are more greedy than ever.

One of these days we'll get that true, forged butter player's blade with a sweet spot the size of Indiana that launches the ball 20 yards farther - you've got to keep buying irons every year if you want to keep up with the progress!  Do what I do, just blame not getting better on the mental game. 😉

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If you manage a publicly traded company the quickest way to maximize your compensation is to drive profit/share price, so doubt equipment prices will come down.

All the companies have been competing on innovation for years based on their advertising, and club/ball design is pretty tightly regulated so not sure where significant new innovation would happen.

Direct suppliers like Sub 70, PXG and New Level may have a more significant impact than COVID.

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GBB Epic 5 wood
Maverick 3/4/5 Hybrid
Steelhead XR Pro 6-GW - Mamiya Recoil 95/110
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23 hours ago, tw_focus said:

I don't think they have a future as a golf equipment supplier.

Why? All things being equal combined with the ever present opinion from a lot of posters on here that's its the archer and not the arrow, wouldn't brand recognition remain the primary driver over other less know brands to the influx of newer golfers?

 

 

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Will Top Golf offer all brands to play with, or only Callaway now?

Srixon z785 Miyazaki 5544; Taylor Made Original One 11
Taylor Made SIM 3W Titanium Diamana Limited
Taylor Made SIM 5W Titanium Diamana Limited
Taylor Made 4, 5 GAP-HI Hybrids KBS 
Ping i210 6-PW Ping graphite
Cobra Black MIM 50, 54, 58 Nippon Tour 105
Scotty Cameron Futura X 8
Callaway Chrome, Maxfli Tour

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I doubt this is sustainable. I mean as OP says there is a clear reason for this. Given the likelihood that more sports will be do-able this summer and going forward, i imagine it will be somewhat of a "mini tiger boom" which will return to normal

 

A lot of people rushed to buy equipment in late Q1-Q2 because it appeared at that time that there would be nothing else legal to do. This kicked up again a bit in September depending on what state/province you lived it (Quebec only individual sports were allowed so golf became popular again)

 

Golf clubs, home Gym equipment like treadmills....these things all sold out. We have a local public course that is basically always rumored to be for sale, you literally couldn't get a tee time there this summer

 

This will not continue...

 

 

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Callaway Mavrik Max 9 w/Hzrdus Smoke Black 80
Ping G410 LST 13 w/Ping Tour 75
Ping G400 Crossover 20 w/KBS Tour Prototype 85
Ping G410 4-SW w/S300
Titleist Vokey SM8 60 M grind

SGC #002 flow neck 385g

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Golf courses did well, equipement manufactuers  did OK, remmebr they had already committed to inventory arrival at the time of out break, so there so called back up orders to the manufactuering plants were likely canceled- hense the eventual shortage of certain products. Many, all in my state the proshops were closed, oh sure you could get something handed to you thru the window but it did impact sales greatly of golf goods including clubs.

 

I don't know of one golf company that going to get you rich from investing. High tech stocks are where its at.

 

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On 1/11/2021 at 11:21 PM, pktaske said:

While we scramble for tee times and count the minutes till sundown while we're on 16, the good news is that golf stocks are paying dividends (figuratively as all monies are reinvested) in a big way. Record golf sales this holiday season were reported as Junior and Bubba unwrapped their new golf bags and drivers. Calloway and Acushnet are hitting new highs each day. Aside from the benefits of stock ownership, what do you think this huge influx of cash will mean over the next few years for us? Cheaper equipment? Inovation?  More suppliers/competition?

 

Other than maybe a few new "boutique" brands popping up trying to take advantage of a good market I don't see much changing on the equipment side of things. I don't know anyone business who thinks it is a good idea to lower their prices as sales are steadily increasing, and innovation (or lack thereof in some years) seems to be a given year in and year out regardless of what the market is doing. 

 

I would hope we'll see some positive changes on the course side of things though. Hopefully with the increased profits from this past year and upcoming year they might be able to complete projects they may have had on the back burner. Things like bunker repairs, redoing greens, range and practice area improvements, new carts, and etc...

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12 hours ago, MtlJeff said:

I doubt this is sustainable. I mean as OP says there is a clear reason for this. Given the likelihood that more sports will be do-able this summer and going forward, i imagine it will be somewhat of a "mini tiger boom" which will return to normal

 

A lot of people rushed to buy equipment in late Q1-Q2 because it appeared at that time that there would be nothing else legal to do. This kicked up again a bit in September depending on what state/province you lived it (Quebec only individual sports were allowed so golf became popular again)

 

Golf clubs, home Gym equipment like treadmills....these things all sold out. We have a local public course that is basically always rumored to be for sale, you literally couldn't get a tee time there this summer

 

This will not continue...

 

 

I agree. It is hard to see now but life will eventually return to a pre-covid sense of normalcy. That is when we see if this so called boom actually has legs. I suspect clubs will lose some membership, people will be unloading home exercise equipment in droves, club manufacturers will struggle to offload inventory again, and golf will have to compete with activities folks have been unable to do because of the pandemic. Just my take on it.

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You may see a small uptick but there needs to be a driver to sustain it and there currently isn't one. For equipment it's turning into the car market. Manufactured have realize there is premium, ultra premium, and budget market. People in the budget market seem to be turning more to used equipment so there is no money to be made there for oem's so they are improving the other two and increasing price points. 

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22 hours ago, pktaske said:

Why? All things being equal combined with the ever present opinion from a lot of posters on here that's its the archer and not the arrow, wouldn't brand recognition remain the primary driver over other less know brands to the influx of newer golfers?

 

 

 

Callaway is basically breaking even on a full year basis right now but they are an "old man brand". Their customer base is dying out, spells bad for long-term success.

 

22 hours ago, Quasimoto said:

Will Top Golf offer all brands to play with, or only Callaway now?

 

Not sure, maybe someone else knows. But it's really questionable whether you want to have your brand name on that gear. "Oh Callaway, that's the brand with the cheeto grips and the puke-stained hosel" - not the best look if you're trying to sell high-margin merchandise.

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On 1/13/2021 at 7:47 AM, MtlJeff said:

I doubt this is sustainable. I mean as OP says there is a clear reason for this. Given the likelihood that more sports will be do-able this summer and going forward, i imagine it will be somewhat of a "mini tiger boom" which will return to normal

 

A lot of people rushed to buy equipment in late Q1-Q2 because it appeared at that time that there would be nothing else legal to do. This kicked up again a bit in September depending on what state/province you lived it (Quebec only individual sports were allowed so golf became popular again)

 

Golf clubs, home Gym equipment like treadmills....these things all sold out. We have a local public course that is basically always rumored to be for sale, you literally couldn't get a tee time there this summer

 

This will not continue...

 

Agreed. Much like many things about COVID, we're not creating something from nothing, we're simply pulling future events forward. The bubble we see today will be offset by the dip that will inevitably come later. Five years from now there will be little net gain or loss, and whatever trajectory these things were on prior to COVID will continue as they were.

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Golf stocks have never been on my buy list.

I stick to commodities - copper, gold, platinum, palladium, silver, rare earths.

The are cyclical like everything else, however there is some predictability if you know where to look.

Srixon z785 Miyazaki 5544; Taylor Made Original One 11
Taylor Made SIM 3W Titanium Diamana Limited
Taylor Made SIM 5W Titanium Diamana Limited
Taylor Made 4, 5 GAP-HI Hybrids KBS 
Ping i210 6-PW Ping graphite
Cobra Black MIM 50, 54, 58 Nippon Tour 105
Scotty Cameron Futura X 8
Callaway Chrome, Maxfli Tour

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Golf is a great sport, but a terrible business model.  No need for me to allocate $s to golf investments just because I love the game.

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Callaway X Hot Pro 3W 15 degrees
Mizuno CLK Hybrid 16 degrees
Titleist 712U 3 iron w/C-Taper X
Mizuno JPX 921 Tour 5-W w/Project X 6.0
Titleist Vokey Blue Slate SM7 52, 58, 60 w/ DG S400
Odyssey ProType Black #9

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