There's nothing that I love more than spending a nice relaxing day on the golf course. With all the snow on the ground right now, golf isn't much more than a dream, but it gives me some time to look at golf stocks and the struggles they've gone through lately. And it gets me wondering about how such an expensive sport can be struggling so much.
Let's start with the good news. Despite Callaway Golf
In the most recent quarter, operating costs were up despite falling sales. That's not exactly a great sign. And even though free cash flow is positive and cash on hand stands at $110.9 million, the company isn't making investments in its future, cutting capital investments in half over the past four quarters.
Despite all this, Callaway's stock has been on a tear, climbing nearly 30% in the past six months. Maybe the market sees improvement I don't, but Callaway just doesn't seem to have its swing in tune right now.
Elsewhere on the course
In early December, Fortune Brands
Golf's struggles seem to be pretty isolated in the sporting goods sector. Dick's Sporting Goods'
Maybe golf will rebound in 2011 and the $300 driver will again become a vogue item to have in your golf bag. If not, 2011 could be a rough year for golf stocks.
Fool contributor Travis Hoium has a Callaway driver and will challenge any and everyone to a long drive contest. He also does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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