The iconic Masters golf tournament is kicking off and has me thinking about golf stocks, with only two actual pure-play golf equities trading on US exchanges. My eye is on Callaway Golf Company , a business that has seen flatlined sales growth over the past few years but is poised to explode with its recently completed merger with Topgolf.
Golf has been seen by analysts as a mature to declining industry for years as Boomers fall off golf companies' income statements, and Millennials/Gen Zs haven't been replacing them at the same pace. The pandemic has changed that with golf being one of the few social outdoor activities where you could maintain the 6 feet of social distance while still socializing. This sport's increased interest can be seen on Callaway's income statement, with Q3 and Q4 illustrating year-over-year sales gains of 15.8% and 14.2%, respectively.
Topgolf Is Changing the Game
The CEO of Callaway, Chip Brewer, said in an interview last year following its announced merger with Topgolf that "Topgolf is the best thing that happened to golf since Tiger Woods. It's transforming the game. And it's going to be the biggest source of growth for our industry."
I couldn't agree with Chip more. Getting Millennials and Gen Zs into golf is crucial for its survival, and Topgolf is the perfect conduit for onboarding this new cohort of players. Golf is a very frustrating sport to start because no one is good. It takes a lot of time, patients, and money to get even decent at the sport, but Topgolf is making it fun to learn with games that give beginners a chance against even veteran players.
Callaway is expected to see over 75% topline growth this year, followed by over 20% in 2022, as the Topgolf synergies begin to be realized. The business will see a negative bottom-line in 2021, with the merger being the increased cost catalyst, but analysts are estimating profitability from 2022 forward.
ELY is trading around $27 a share, and I am looking at price targets ranging from mid $30s to as high as $50 in bull cases. 6 out 8 analysts are calling this stock a buy today with no sell rating from sell-side analysts. Zacks recently downgraded ELY to a sell, but only because of the merger costs that will weigh on short-term earnings (nothing to be concerned about). ELY is the golf stock to buy if you are interested in being a part of this space.
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After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
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One Golf Stock To Watch As The Masters Golf Tournament Kicks Off
The iconic Masters golf tournament is kicking off and has me thinking about golf stocks, with only two actual pure-play golf equities trading on US exchanges. My eye is on Callaway Golf Company , a business that has seen flatlined sales growth over the past few years but is poised to explode with its recently completed merger with Topgolf.
Golf has been seen by analysts as a mature to declining industry for years as Boomers fall off golf companies' income statements, and Millennials/Gen Zs haven't been replacing them at the same pace. The pandemic has changed that with golf being one of the few social outdoor activities where you could maintain the 6 feet of social distance while still socializing. This sport's increased interest can be seen on Callaway's income statement, with Q3 and Q4 illustrating year-over-year sales gains of 15.8% and 14.2%, respectively.
Topgolf Is Changing the Game
The CEO of Callaway, Chip Brewer, said in an interview last year following its announced merger with Topgolf that "Topgolf is the best thing that happened to golf since Tiger Woods. It's transforming the game. And it's going to be the biggest source of growth for our industry."
I couldn't agree with Chip more. Getting Millennials and Gen Zs into golf is crucial for its survival, and Topgolf is the perfect conduit for onboarding this new cohort of players. Golf is a very frustrating sport to start because no one is good. It takes a lot of time, patients, and money to get even decent at the sport, but Topgolf is making it fun to learn with games that give beginners a chance against even veteran players.
Callaway is expected to see over 75% topline growth this year, followed by over 20% in 2022, as the Topgolf synergies begin to be realized. The business will see a negative bottom-line in 2021, with the merger being the increased cost catalyst, but analysts are estimating profitability from 2022 forward.
ELY is trading around $27 a share, and I am looking at price targets ranging from mid $30s to as high as $50 in bull cases. 6 out 8 analysts are calling this stock a buy today with no sell rating from sell-side analysts. Zacks recently downgraded ELY to a sell, but only because of the merger costs that will weigh on short-term earnings (nothing to be concerned about). ELY is the golf stock to buy if you are interested in being a part of this space.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>