Golf as a Community Experience: New Trends and Investment Opportunities in the Golf Sector

The world of golf is experiencing a remarkable transformation into a social experience. About half of the golfers surveyed now primarily play with friends, highlighting the communal aspect of the game. This creates an opportunity for golf course operators to adjust their marketing strategies and increase engagement. Additionally, the demand for golf lessons is rapidly increasing—36% of golfers took lessons in the past year, and among GolfNow users, this figure is even 67%. This underscores the strong desire to improve one's skills, independent of competitive ambitions. Golf stocks are part of the cyclical consumer goods equities, as products like golf equipment, clothing, and memberships are considered discretionary items that are increasingly purchased under favorable economic conditions. In economic boom periods, these stocks experience an upturn, while they suffer during downturns. The golf business often mirrors broader consumer trends: increased participation in recreational activities such as golf typically signals a strong economy. In economic downturns, however, consumers prioritize essential expenses over leisure activities, which can lead to a decline in revenue. Jeff DeGraaf, Chairman and Head of Technical Research at Renaissance Macro, recently emphasized on CNBC the favorable seasonal conditions currently, especially for cyclical stocks until 2025. He pointed out that despite limited internal momentum, a consolidation phase could be on the horizon, which should not be viewed negatively. Overbought conditions in yields and the dollar, which are currently declining, could actually benefit cyclical stocks. While there is uncertainty regarding the future movements of yields and the dollar amid upcoming elections, DeGraaf noted negative trends. He suggested that the current overbought conditions might ease throughout the fourth quarter. His overall forecast indicates a cautiously optimistic stance towards cyclical stocks, shaped by seasonal trends and overbought indicators. Golf stocks offer an exciting investment opportunity, as they align with the broader trends of cyclical consumer goods equities and thrive during expansions. With growing participation in recreational activities and the anticipated growth of the golf industry, golf-specific companies are well-positioned to benefit from increasing consumer spending.