Golf: From a Social Experience to an Economic Opportunity

Golf has evolved from an individual sport into an increasingly social activity, offering new opportunities for golf course operators to refine their marketing strategies and enhance engagement. Nearly half of the golfers surveyed primarily play with friends, highlighting the communal aspect. Furthermore, there is a growing demand for golf lessons, as 36% of golfers took lessons last year—a figure that rises to 67% among users of the GolfNow platform. This data underscores the persistent desire to improve one's golfing skills, regardless of competitive ambitions. Golf stocks are typically classified under consumer cyclicals. This classification is due to the nature of the products and services, such as golf equipment, apparel, and memberships, which are considered discretionary purchases. During economically prosperous times, investment in these products increases, causing golf stocks to exhibit typical characteristics of consumer cyclicals. Participation in leisure activities like golf is an indicator of a strong economy, and companies in the golf industry are directly linked to consumer spending patterns in leisure and recreation. Jeff DeGraaf, chairman and head of technical analysis at Renaissance Macro, recently stated on CNBC that current seasonal trends could present a good opportunity for cyclical stocks. Although there is currently a lack of internal momentum, according to DeGraaf, this suggests a consolidation phase, which can be viewed positively. Particularly interesting is the correlation between the seemingly overbought yields and the dollar, which are currently in a downward trend. He pointed to the end of October as one of the most promising weeks for three-month returns. Despite existing uncertainties regarding future movements of yields and the dollar, especially with upcoming elections, the combination of current macroeconomic conditions and seasonal trends results in an optimistic outlook for cyclical stocks. The golf industry could benefit from these developments, as it aligns with the overarching trends of consumer cyclicals and is driven by increased consumer activities. Among golf stocks, some are considered promising due to their popularity with hedge funds. Our analyses have shown that by mimicking the best investment decisions of hedge funds, market performance can be surpassed. For example, Big 5 Sporting Goods Corp. is regarded as one of the top golf stocks. Although the company faces challenges such as declining sales and rising operating costs, it demonstrates resilience through its strong product range. While Big 5 Sporting Goods Corp. has potential, we believe that AI stocks offer an even greater prospect for high returns.