4/11/2011
By Brian Sozzi, Research Analyst

Who besides golf legend and three-time Masters champion Nick Faldo had South African Charl Schwartzel on the radar screen this past weekend?  If you picked the lanky golfer in the office pool to win the coveted green jacket, shoot me an email as I would love to know some of your stock picks.  Being a former hardcore caddy that has a few club championships on his resume (note caddies often see themselves as vitally integral to their player's wins; in reality, the highly skilled player is executing the shot), I shoved my support to Schwartzel at the turn onto the back nine.  I essentially shorted the rest of the field, including Tiger Woods who has the yips from five feet in on the putting green, and went long Schwartzel given the following on-air characteristics: (1) repetitive, free flowing swing; (2) calm, relaxed demeanor; and (3) outside of Luke Donald, was the only player cracking Phil Mickelson-esque smiles.  It was a riveting conclusion to the Masters, and the clearest sign yet that the youth movement in the game (Kaymer, Mcllroy, Fowler), the older guard (Woods, Mickelson, Els), and intriguing stories (Couples, Watson) will be great for the game and hopefully continue up until the 2016 summer Olympics.

By the time those 2016 summer Olympics rolls around, yours truly will no longer be a 20 something and the U.S. presidential election cycle will be in full gear.  Tiger Woods will likely have gotten his golf game in order after the latest swing change and in the process, perhaps passed Jack Nicklaus for the all-time majors win record.  Phil Mickelson, Tiger's arch nemesis on the links, will be inching ever so closer to the Champions Tour, while the quintessential golf pro Davis Love III will have about a year under his belt of attacking short yardage courses with his fellow 50 year old plus competitors.

In case you have been missing the short teaser commercials that began in 2010, golf is back at the summer Olympics.  After being on an Olympics hiatus since the 1904 summer games in St. Louis, the powers that be have realized how international golf has become.   Just check out the leader board at the Masters yesterday!  Amongst the top 10 in the rankings, there are only four U.S. representatives, Tiger Woods (an astonishing fifth), Phil Mickelson, Steve Stricker, and the very consistent Matt Kuchar (my brother caddied for him in a practice round for a local event, it's the highlight of his sporting life...so says his older brother).  The disparity is even larger in women's golf, where Cristie Kerr, Paula Creamer, and Michelle Wie are the only U.S. representatives ranked in the top 10. 

Admittedly this note is more food for thought, so tuck it away and use six months prior to the 2016 summer Olympics.  This is likely when the companies having the greatest exposure to the games will begin to price in future earnings power.  If you have a fair amount of spare time available, modeling for earnings in the calendar year 2016 out year for companies like Polo Ralph Lauren (RL), Nike (NKE), and Dick's Sporting Goods (DKS) is worthwhile.  I expect these companies to represent the Olympic investment names, provided a Dick's Sporting Goods is not a division of Wal-Mart (never say never).  Golf on such a global stage will cause a few things, including: (1) create sales opportunities for apparel and footwear manufacturers, centering on Olympic themed goodies (these will be needed as cotton prices...well...are going to be higher than today's inflationary post); and (2) increase interest in the game in emerging markets with a younger generation and amongst adults who desire to dress like Tiger Woods or Michelle Wie.

Tiger may be a grizzled veteran with a bum knee by 2016, and Phil 20 pounds heavier, but the game of golf could be at its strongest in terms of global interest when the Olympics hit the television airwaves.  That, in my view, is good for the business of golf. 

Golf at the 2016 Olympics:
* 72 hole stroke play tournament for men and women.
* 60 players in each field.

Brian Sozzi
Wall Street Strategies

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