Golf company stocks have
been hurt by a continuing
decline in game play

NEW YORK » The U.S. Open is a hot topic in sports circles this week, but golf stocks are a bit less popular on Wall Street. Though stars like Phil Mickelson, Tiger Woods and Vijay Singh have earned millions from the game, publicly traded golf companies and their shareholders have had a much tougher time making a profit.

Like many industries, the business of golf has gone through a cycle over the last several years, surging through the 1990s and declining after the bubble burst. Many companies that were rushed to market over the last decade have been delisted from the major indexes, and with the number of core golfers flat and rounds played down, the survivors have faced hard times, as well.

"There's a lot of money going around and being spent in golf, but the investors in these companies are really not benefiting from that," said Brent M. Wilsey, president of Wilsey Asset Management in San Diego.

"I'm always looking for companies with good revenues, low expenses, low debt and that are increasing shareholder value by doing things like buying back shares ... and you won't see any golf stocks in our portfolios."

Eye-popping greens fees might make you think that real estate investment trusts would be a good way to make money in golf, but maintaining those beautifully manicured courses leads to substantial overhead costs. Golf Trust of America Inc., which once operated 47 courses, has been in liquidation mode since 2001. Its stock, which strode past $35 in 1998, now trades around $1.60 on the American Stock Exchange.

The options in equipment makers are more varied, but not necessarily more appealing. Adams Golf Inc. went public to great fanfare in 1998, and saw its stock price surge to nearly $20 before nearly going out of business; its shares now trade over the counter for about $1.20.

Much as the success of retailers is calculated each month by what are called same-store sales, rounds played measures the profitability of golf courses. According to the National Golf Foundation, which collects data from nearly 1,300 U.S. courses, rounds played declined by 3.2 percent through April, compared to the same period last year.

Suffice it to say, the industry has not lived up to the vision that many had for it back in the late '90s. It's increasingly competitive, and far from growing, appears fairly mature, said John V. Moran, a research analyst at Ryan Beck & Co.