Is golf permanently in decline? There has been a flood of golf course closings lately. Rounds played in 2007 were down 0.5% nationwide. This was due to a large -6% decrease in south central states but other regions were slightly negative, flat or up about 1 percent. Adding to the weakness is the poor housing market with many communities set up around golf courses.

I think there is promise though. What could be the needed catalyst for the golf industry is the tens of millions of baby boomers that will be retiring from now until 2020. Also, the recent weakness could help the industry reach an equilibrium in what has been an over expanded, overly competitive environment. Here are some stocks to get in on the play.

Golfsmith International Holdings (GOLF)
Not only do they have a great ticker symbol GOLF but they just got a new CEO Martin Hanaka who has been chairman and chief of Sports Authority. This small company with a market cap of only $37 million has just over 70 stores so there is a lot of potential growth to move the needle.

Manufacturers
Callaway Golf Co. (ELY) has had a mixed history when it comes to good results. The past three years have been better. If golf is gangbusters Callaway could go along for the ride.

Adams Golf Inc. (ADGF) looks like a better value. Unlike Callaway they have doubled shareholder equity since 2003 and the stock is incredibly cheap.

Fortune Brands (FO) is a holding company that is one of the worlds largest in spirits and wine but they also have golf mega brands Titleist which the number one ball, Footjoy, Cobra, Pinnacle and Scotty Cameron.


full disclosure: long Fortune Brands FO