Stocks | Jun 15, 2007 | 1 Comment

Golf GPS Stocks

Last night I was watching “On the Money” on CNBC and they had a piece about GPS Industries (Symbol: GPSN.OB), who makes a golf GPS system called the “InforemerHD.” The system looked polished, and I think it’s something that will continue to grow.

If you’re looking for a low-capital highly speculative play that might pay off, this just might be it. After doing some research into golf GPS systems, I learned that GPS Industries is 3rd in golf GPS system installations worldwide. They have their system installed at approximately 100 golf courses worldwide. GPSN.OB was trading at $0.11 per share on June 15.

The company with the most golf GPS system installations is ProLink Solutions (Symbol: PLKH.OB). Their golf GPS system is installed at 500 golf courses worldwide. PLKH has dipped some recently. As of June 15 it was trading at $1.25 per share. It opened 2007 at $1.60 per share.

Golf GPS Market

The estimated market for golf GPS systems is 4-6 billion. There are over 40,000 golf courses worldwide—about 17,000 of those are in the USA.

Golf GPS is relatively new in its application, but it’s growing. It may even be used to track lost balls some day. The InforemerHD system I saw from GPS Industries looked more advanced than the golf GPS from ProLink Solutions.

My Take On Growth

I think many more golf course owners will look towards adding these systems, because they can deliver advertising, which means more revenue. And they can keep people moving at the required pace, by messaging slow players to speed up—all from a convenient interface.

The bottom line is that these systems give golf course management more control and more revenue options.

Best Product

The InforemerHD from GPS Industries is the better product. It’s not cart-dependent, so golf courses won’t have to order new carts to utilize the product—a major advantage over the competition.

The unit can be cart-mounted or hand-held and it utilizes Wi-Fi. It’s also scalable and very reliable.

Golf GPS Stock Basket

I think this market has some great upside. Let me just say again that buying these stocks is highly speculative.

If I were to get into this market, I’d make a mini-basket with stock from GPS Industries and ProLink Solutions.

The total number of courses using GPS systems is unknown, but some figures have it at just over 1,000. These two companies appear to have about a 60% market share and one of them has the best overall product currently. Arguably, the other has a better sales force.

The volume on these two stocks is very low—a little higher lately due to the CNBC coverage.

GPS Industries owns patents for golf-related GPS applications and ProLink is a licensee of theirs.