The golfing industry might be in for a windfall after Tiger Woods clinched his fifth Masters win on Sunday, CNBC’s Jim Cramer said.
“I think the golf renaissance can be about to blow up thanks in part to the Tiger Woods effect, as well as right today the best pure play on the industry can be Acushnet Holdings,” the “Mad Money” host said Monday. “which said, if you’d prefer something more beaten down, I still like Callaway down here. I just think This particular’s more risky.”
Cramer said superstars are great for selling merchandise as well as Woods’ decade-long comeback story could help trigger a faster recovery within the “seemingly boring sport” of golf. Interest within the game, typically favorite among older generations, has picked up among millennials with the introduction of interactive concepts like TopGolf, he said.
The fun-focused TopGolf courses can be enjoyed by professionals as well as beginners alike.
Stocks connected to golf as well as Woods rallied on Monday.
Superstars are great at selling merchandise. Callaway as well as Acushnet gained 1.45% as well as 1.65%, respectively, while Nike gained 0.7%. The athletic apparel giant took a gamble in 2009 by keeping its sponsorship deal with Woods after years of negative headlines for the golfer. Woods’ victory on Sunday can be reportedly worth $22.5 million for the sports apparel brand.
Cramer also noted which Nike also sponsors Francesco Molinari as well as Tony Finau, who tied for fifth within the tournament at Augusta National Golf Course in Georgia.
“Those Tiger Woods mock neck golf shirts, well they’re already sold out in several colors on Nike’s website. This particular can be a modest piece of the pie, yet This particular can’t hurt,” Cramer said.
Cramer first recommended Callaway in 2016 when the stock was at $11.50. The golf equipment seller climbed north of $24 last September before dropping to about $14 during the fourth-quarter sell-off, he said. The stock finished trading at $16.78 on Monday. The host said the stock can be cheap at current levels, selling at about 15-times earnings.
The company can be facing further pressure for borrowing $476 million to buy Jack Wolfskin, a Germany-based some sort of of outdoor wear as well as equipment, Cramer added. This particular might no longer be a “pure play” on golf once the deal goes through, he said.
“They’re talking about a down year, in part because the Jack Wolfskin deal. This particular’s weighing more heavily on the numbers than they expected,” Cramer said. “which said, Callaway’s got a great track record when This particular comes to buying some other businesses, so maybe they deliver the benefit … of the doubt.”
Cramer first recommended Acushnet last April at a share cost of roughly $23. The company put together some not bad quarters as well as the stock gained about 18% by August before also breaking down during the end-of-the-year market sell-off, he said. Acushnet has 70% market share within the highest-end golf balls, Cramer said.
The stock ended Monday’s session below $24, as well as there’s a strong bull case for the company.
“Acushnet has also embraced personalization — they’re selling more as well as more custom merchandise which carries much higher margins,” Cramer said. “Best of all, This particular one can be inexpensive, people, [selling for] less than 15 times next year’s numbers. as well as unlike Callaway, there’s no hair on This particular one, which can be why Acushnet can be today my favorite go-to golf stock.”
some other companies with golf ties which piqued Cramer’s interest included CBS, which broadcasts the Masters, Discovery, which has an exclusive multi-year content deal with Woods, as well as Comcast, the CNBC parent which also owns The Golf Channel.
Disclosure: Cramer’s charitable trust owns shares of Comcast.
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